Wall Street closed lower on Thursday after weak sales at many of the major US retailers heightened concerns about consumer spending. Investors were also disappointed by news that the US trade deficit soared more than 10% to US$63.9 billion in March, which was its highest level in six months.
The Dow ended down 147.74 or 1.11% at 13,215.13, while the S&P 500 closed down 21.11 or 1.40% at 1,491.47. The Nasdaq finished 42.60 or 1.65% lower at 2,533.74.
Companies including Wal-Mart Stores, JC Penney and Federated Department Stores said sales fell in April, hurt by rising gasoline prices. Federated fell 3.9%, Wal-Mart dipped 0.4% and JC Penney fell 1.8%.
Grocery retailer Whole Foods Market yesterday said slowing sales growth and rising costs hurt first quarter profits. The natural and organic foods retailer's results missed Wall Street's expectations and its stock dropped 11%.
Interpublic Group slumped 7% in active New York Stock Exchange trading after the advertising services company reported a steeper-than-expected quarterly loss.
Elsewhere, shares in Johnson & Johnson and Amgen slid 2.5% and 9.1% respectively after a Food and Drug Administration panel said their anti-anaemia drugs should face further restrictions.
Viacom said Thursday that its first quarter net income fell 36% amid higher production and restructuring costs at MTV. Its shares fell 1.3%.
On the upside, shares of JetBlue Airways jumped 5% after the company pushed out founder David Neeleman as CEO three months after an embarrassing service fallout.
NYMEX light crude oil for June delivery rose 26c or 0.42% to US$61.81 a barrel.
COMEX gold for June delivery fell US$15.50 or 2.27% to settle at US$667 an ounce, placing pressure on the gold plays. Rangold Resources declined 3.5%, Harmony Gold lost 4.1%, while Freeport McMoRan shed 2.7%.
In Europe, Britain's key share index ended lower as the Bank of England signalled further tightening after raising rates to their highest level in six years. Miners also weighed, contributing 18 points towards the index's fall.
Miners accounted for eight of the top 10 losers as expectations that BHP Billiton would bid for rival Rio Tinto failed to materialise. Rio Tinto lost 3.3% while BHP slipped 3.5%.
In the same sector, Anglo American dipped 2.6%, Xstrata fell 3.4% and Antofagasta eased 3.9%.
But property stocks managed to soften the blow, with Hammerson up 6.7% after a newspaper report said private equity group Kohlberg Kravis Roberts was considering a bid for the firm.
Friends Provident leapt 8.4% to top the leader board as traders cited talk of bid interest from French insurer AXA.
Shares in British telephone directories publisher Yell Group gained 2.6% after traders cited market talk of possible private equity interest.
The FTSE 100 closed down 25.5 or 0.39% at 6,524.1.
On the other side of the channel, share prices in Paris closed lower as an early fall on Wall Street prompted some profit taking. In Frankfurt, stocks also fell as investors mulled over statements by ECB president Jean-Claude Trichet that indicated an impending interest rate hike in June.
Societe Generale was among the major fallers in France, down 2% after it disappointed investors with a 1.9% dip in first quarter profit.
Commerzbank led Germany’s blue chip stocks lower, closing down 2.6% on profit taking after yesterday's strong gains which were made on the back of solid quarterly figures.
The French CAC-40 finished down 38.87 or 0.64% at 6,012.76, while the German DAX-30 was 60.66 or 0.81% lower at 7,415.33.
In Asia, Japan’s Nikkei closed flat as Toyota Motor slipped after posting a surprise fall in quarterly operating profit, which offset gains in property shares. Toyota was a major drag on the key stock average, ending down 1.8%.
The Nikkei ended down 11.16 or 0.06% at 17,736.96.
Hong Kong share prices closed lower, hit by profit taking in property stocks and select blue chips amid a lack of fresh leads.
Cheung Kong ended down 1.8%, while New World Development fell 1.2%.
The Hang Seng closed down 98.51 or 0.47% at 20,746.27.
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