Stocks Follow Big Rally With Losses - TheStreet

Updated from 4:02 p.m. EDT

Stocks closed lower Thursday as investors endured another anthrax scare, this one involving letters found at a

Federal Reserve mail facility, and word that the recession can't be declared over just yet.

The

Dow Jones Industrial Average finished with a loss of 104.41 points, or 1%, to 10,037.42. The

Nasdaq fell 45.81 points, or 2.7%, to finish at a session low of 1650.48. The

S&P 500 was down 15.84 points, or 1.5%, to 1073.01.

The declines for blue-chips and tech stocks came a day after the Dow and the S&P enjoyed their largest percentage gains since September, and the Nasdaq had its best day in more than a year.

According to the

Associated Press

, traces of anthrax were detected in a preliminary test at a Fed mail facility, but investigators didn't find any of the powderlike substance that was used in a round of anthrax infections last fall. "The affected mail was routine commercial and business mail and did not have any of the characteristics identified by the FBI as suspicious," the Fed said in a statement.

Late in the session, the minutes of the

Federal Open Market Committee's March meeting were released. The minutes revealed that the Fed's policymaking arm discussed the need to raise the

federal funds target rate at some point, but not before having a better idea about the strength of the economic recovery.

Separately, the National Bureau of Economic Research said some indicators suggest that the recession in the U.S. has ended, but the research organization didn't formally declare an end to the downturn.

The Labor Department said before the bell that

initial jobless claims fell to 411,000 in the week ended May 4 from a revised 422,000 in the previous week. Economists were expecting the number of first-time claims to come in at 405,000, according to

Reuters

.

In another report, data showed that U.S. import prices rose 1.4% in April because of escalating petroleum prices, following a 1.2% rise in March. Export prices rose 0.4% last month.

On the corporate news front, the nation's retailers claimed center stage, as monthly chain-store sales were released, including results from

Wal-Mart

(WMT) - Get Report

and other big names. Wal-Mart, the biggest retailer of them all, said same-store sales rose 3.3% in April, below estimates of a 3.9% increase, but the company maintained its first-quarter earnings guidance. Shares of Wal-Mart ended down 2.5% to $54.99.

Elsewhere in the retail space,

Pacific Sunwear

(PSUN)

warned that first-quarter earnings would fall short of analysts' expectations citing a weaker than expected sales climate. The company said same-store sales dropped 6.7% in April. Shares lost 12.3% at $20.81.

Gap

(GPS) - Get Report

saw its shares rise 7.3% to $15.79 after the apparel retailer forecast a first-quarter profit, despite reporting a sharp decline in April sales. The company continued its two-year-long streak of falling monthly same-store sales, saying that comparable numbers slid 24% in April. Analysts were expecting a 30% drop.

Limited

(LTD)

said April same-store sales were flat with year-ago levels, as sales were hurt by the timing of the Easter holiday. The holiday, which usually boosts sales, was in March this year, as opposed to April last year.

Claire's Stores

(CLE)

said same-store sales fell 7% for the same reason, but the company raised its first-quarter earnings forecast.

AnnTaylor

(ANN)

also increased its first-quarter earnings estimates, and the stock climbed 4.4% to $48.17.

Federated Department Stores

(FD)

advanced 4.6% to $41.39 after raising its first-quarter estimates.

On the whole, the retail sector was weaker. The Dow Jones U.S. Retail Index lost 1.1%.

Things aren't getting any better for

Enron

these days as reports circulated that the bankrupt energy trader and at least two of its peers colluded to secure profits by using false information to resell excess power during the 2000 California energy crisis.

According to

The Wall Street Journal

, memos sent by two Enron attorneys outlined a scheme in which Enron's trading unit requested power on behalf of its retail customers that was actually not needed, only to turn around and sell that additional power to California's system operator for a profit.

Outside the business world, Israeli officials gave the go-ahead for military strikes Thursday following a suicide bombing near Tel Aviv that killed 15 people.

U.S. Treasury issues were higher. Around 4 p.m. EDT, the 10-year note was up 13/32 at 97 26/32, yielding 5.16%.

Overseas markets were mixed. London's FTSE 100 was down 0.2% at 5198, while Germany's Xetra DAX was off 1.2% to 4966. Japan's Nikkei 225 finished up 1% at 11,633, and Hong Kong's Hang Seng slipped 0.6% to 11,701.