Updated from 4:17 p.m. EDT
Stocks drifted lower Friday as the market, lacking any other real catalysts, let an uptick in retail sales revive worries about inflation and more interest rate hikes by the
Dow Jones Industrial Average
lost 36.34 points, or 0.33%, to 11,088.03, and the
fell 5.07 points, or 0.4%, to 1266.74. The
was off 14.03 points, or 0.68%, at 2057.71. The 10-year Treasury was down 9/32 in price, lifting the yield to 4.97%, and the dollar rose against the yen and the euro.
Losses of 1.9% or more in
pressured the Dow.
Meanwhile the tech-laden Nasdaq was dragged lower by a 2.3% decline on the Philadelphia Semiconductor Sector Index. All of the index's 19 components finished in negative territory following a weak earnings report from chipmaker
. Analog plunged 16.2%.
For the week, the Dow dropped 152 points, or 1.4%, and the S&P 500 fell 13 points, or 1%. The Nasdaq gave back 27 points, or 1.3%, over the five sessions.
"The past week didn't instill much confidence," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "This week we had problems with oil, terrorist problems and a Fed meeting, but people were still focused on a slowing economy. There could be another rate hike looming, but investors are overly concerned with the U.S. economy, which is why we didn't see much action today."
Volume was light during the session, as 1.32 billion shares changed hands on the
New York Stock Exchange
. About 1.45 billion shares traded on the Nasdaq. Decliners outpaced advancers 2 to 1.
U.S. markets staged an impressive performance Thursday, as all three major equity averages rose despite the startling news that British authorities broke up a terrorist plan to smuggle explosives on board a series of commercial jets and destroy the planes in flight.
The fact that stocks advanced suggested Wall Street is becoming accustomed to dealing with a certain amount of terrorism risk in the market and viewed the disruption of the plot as a positive.
However, Ken Tower, chief market strategist with CyberTrader, said "there are many more negative indicators than bullish ones at present. Until something happens to turn the indicators positive, the path of least resistance remains down."
Oil, which shed $2.35 in the prior session, recaptured some of that lost ground. Crude was higher by 35 cents to close at $74.35 a barrel in Nymex trading. Gold, meanwhile, extended Thursday's decline, finishing down $1.60 to $644.40.
Friday's economic docket was full. The Commerce Department said retail sales rose 1.4% last month, compared with a 0.4% decline in June. Economists expected a 0.8% increase. Excluding automobiles, sales were up 1% during July, also ahead of estimates.
"Overall, this is a stronger report than we were expecting," said Ian Shepherdson, chief economist with High Frequency Economics. "Retailing is holding up quite well, but we expect a sustained slowing over the next few months. Note that June sales ex-autos were revised down by 0.2% so the net overshoot against consensus is not as big as it first looks."
Separately, the Labor Department said import prices rose 0.9% in July, in line with expectations. U.S. export prices rose 0.4% for the month. Also, the Commerce Department said business inventories rose 0.8% for July as business sales were up 0.2%. Inventories were expected to have risen 0.5% for the month.
Meanwhile, options-backdating probes continue to trouble dozens of companies. Since Thursday's close,
have been among the companies saying they will delay their quarterly filings with the
Securities and Exchange Commission
in order to finish their reviews of past option grants.
Apple, in documents filed with the SEC, said it will restate its past financials in order to record noncash charges for compensation related to option awards. The company expects "significant" changes to its operating results for the July quarter, as compared with a year ago. Apple lost 42 cents, or 0.7%, to close at $63.65.
sank 3.2% after the company delayed filing its quarterly results after its audit committee found issues with past stock-option grants. Nvidia gave back 76 cents to $23.40.
said it's considering continuing operations at parts of Alaska's Prudhoe Bay field. The company had been planning to shut down the entire operation, taking out 400,000 barrels a day of crude, to fix a problem with a pipeline. The western part of Prudhoe Bay is still running, and a decision whether to shut in that area is expected by the beginning of next week. BP fell by 44 cents, or 0.6%, to $69.32. For the week, the stock slid 3.6%.
said after Thursday's close that it made $232.4 million, or 69 cents a share, for the second quarter, up from $187.2 million, or 54 cents a share, a year earlier. Analysts had expected earnings of 65 cents a share. Kohl's also raised its full-year earnings forecast. Kohl's rose $2.57, or 4.4%, to $60.76.
Among analyst actions, Merrill Lynch cut its full-year earnings estimate for
to $1.10 from $1.24 a share, as the drugmaker will start facing generic competition to its biggest seller, the blood thinner Plavix. Shares were off 59 cents, or 2.8%, to close at $20.24.
Overseas markets were mostly lower, with London's FTSE 100 down 0.1% to 5820 and Germany's Xetra DAX off 0.1% to 5628. In Asia, Japan's Nikkei dropped 0.4% overnight to 15,565, and Hong Kong's Hang Seng edged up 0.2% to 17,249.