Stocks fall on weak economic reports, Iraq turmoil

NEW YORK (AP) -- A combination of so-so economic news and violence in Iraq helped push the stock market sharply lower Thursday.<br /> <br /> Stocks fell from the start of trading on a government report that retail sales for May came in slightly lower than expected. A separate report on jobs was weak, too. A surge in oil prices as violence flared in Iraq also weighed on the market, and hammered airline stocks.<br /> <br /> For the Standard and Poor's 500, it was the third down day in a row, a reversal of sorts from steady, if unremarkable, rises for much of the year. The index is heading for its first weekly loss in three weeks.<br /> <br /> Uri Landesman, president of hedge fund Platinum Partners, said investors had gotten too complacent about the S&P 500's slow rise this year, following a nearly 30 percent increase in 2013, and the pullback wasn't surprising.<br /> <br /> "It's time for profit taking, taking risk off the table," he said. "It's very rare that markets move up in straight line."<br /> <br /> The Dow Jones industrial average fell 109.69 points, or 0.7 percent, to 16,734.19. The Nasdaq shed 34.30 points, or 0.8 percent, to 4,297.63. The S&P 500 was down 13.78 points, or 0.7 percent, to 1,930.11.<br /> <br /> In the retail report, the Commerce Department said U.S. sales rose 0.3 percent last month, helped by a surge in auto demand. That was the fourth straight month of gains, but shy of the 0.4 percent increase that economists expected.<br /> <br /> The Labor Department said that weekly applications for unemployment benefits rose 4,000 to a seasonally adjusted 317,000.<br /> <br /> "The data today was a little unfulfilling," said Lawrence Creatura, a portfolio manager at Federated Investors. Still, he was optimistic in the face of selling because he believes the economy is generally strengthening. "We're definitely not flinching. We're holding our positions."<br /> <br /> Energy stocks rose broadly after insurgents captured two cities in Iraq, raising the specter of disrupted global oil supplies. The price of oil rose $2.13, or 2 percent, to $106.53. (See related story. Link below.) Diamond Offshore Drilling climbed $1.89, or 4 percent, to $48.77, making it the second-biggest gainer in the S&P 500.<br /> <br /> Among the 10 sectors in the S&P 500 only energy and utility companies were up for day.<br /> <br /> A combination of higher oil prices and a warning by Lufthansa of smaller profits due to weaker passenger demand helped push airline stocks down sharply. Delta Air Lines fell $2.21, or 5 percent, to $38.50, the most in the S&P 500 index. United Continental dropped $2.66, or 6 percent, to $42.60.<br /> <br /> In the bond trading, the yield on the 10-year Treasury note, which moves in the opposite direction to its price, slipped to 2.59 percent from 2.64 percent on Wednesday.

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