Weak Retail Sales Report Halts Stock Market Rally

TIM PARADIS

NEW YORK (AP) — Wall Street shifted into reverse Tuesday after a surprisingly weak retail sales report punctured investors' optimism about the economy.

The poor sales data, combined with a sharp drop in wholesale prices, came just as the corporate earnings season, usually a volatile time in the market, got under way. The Dow Jones industrials lost nearly 140 points.

Underscoring the market's sensitivity, shares in Intel Corp. fell sharply in after-hours trading after the chipmaker reported weaker results after the bell and didn't offer a forecast for revenue.

Investors are already braced for bad earnings but are highly anxious about forecasts from companies that could indicate a weaker economy. Poor outlooks in the last earnings season in January derailed a 20 percent rally, and some fear the market's current five-week rally could be vulnerable as well.

Financial stocks tumbled after Goldman Sachs Group Inc. announced strong profits but said it would raise $5 billion to repay government bailout money. Investors speculated that other major banks might follow suit, which would put pressure on their stocks. Citigroup Inc. and JPMorgan Chase & Co. are also due to report results this week.