* Retail sales top expectations; initial jobless claims jump
* Lululemon tumbles after Q4 sales warning
* Hilton, Aramark climb in first day after IPOs
* Dow down 0.7 pct, S&P 500 off 0.4 pct, Nasdaq off 0.1 pct
By Chuck Mikolajczak
NEW YORK, Dec 12 U.S. stocks slid on Thursday,
putting the S&P 500 on track for a third straight fall as
economic data did little to give investors clarity on how soon
the Federal Reserve would begin to scale back its stimulus
Concerns that the Fed would taper its stimulus earlier than
expected have weighed on the market for days. The three major
U.S. stock indexes recorded their biggest drop in a month on
Wednesday as traders took profits from the recent rally a day
after a provisional budget deal was reached in Washington. The
budget agreement removed a potential economic hurdle cited by
the Fed in September when it chose to keep its stimulus intact.
Many market participants have expected the Fed to announce a
cut in stimulus in March, but that timeline may have been
accelerated by some in the wake of Friday's better-than-expected
November payrolls report. The Fed has said it would slow its $85
billion a month in bond purchases when certain economic measures
meet its targets, including a drop in the U.S. unemployment
Data on Thursday once again sent mixed signals on the
economy, as retail sales rose solidly in November and October
business inventories showed the largest gain since January.
However, initial claims for unemployment benefits surged last
week - rising 68,000 in their biggest jump in a year.
"It's a little bit of manic concern over tapering. The
economy is not really getting that much better," said Stephen
Massocca, managing director at Wedbush Equity Management LLC in
"The equity income space is under pressure over tapering
fears - to the point it is getting a little cuckoo."
The central bank's massive bond-buying program has been a
driving force in the S&P 500's gain of 24.5 percent this year.
The Fed's policymakers are due to meet Dec 17-18 for the
final time this year.
The Dow Jones industrial average fell 107.64 points
or 0.68 percent, to 15,735.89. The S&P 500 lost 6.89
points or 0.39 percent, to 1,775.33. The Nasdaq Composite
dropped 4.335 points or 0.11 percent, to 3,999.478.
Facebook Inc helped limit the Nasdaq's decline. Shares
of the social networking company shot up 3.8 percent to $51.25
after Standard & Poor's said that Facebook will join the S&P 500
after the close of trading on Dec. 20.
In the retail sector, shares of J.C. Penney Co Inc
slipped 0.1 percent to $8.47. Chief Executive Officer Mike
Ullman told Reuters in an exclusive interview that the
department store chain is eliminating or trimming some
high-profile brands introduced by former CEO Ron Johnson. Penney
intends to use the floor space for its more profitable
Lululemon Athletica Inc shares tumbled 11 percent to
$60.83 after the yoga apparel company said fewer customers are
visiting its stores and supply-chain issues are hitting sales in
the crucial fourth quarter.
Investors also dealt with a flurry of initial public
offerings, including Hilton Worldwide Holdings Inc. The
stock rose 8 percent to $21.60 from its $20 pricing on the New
York Stock Exchange. The debut marked the hotel operator's
return to the public markets some six years after Blackstone
Group LP took it private in one of the largest deals of
the leveraged-buyout boom.
Food services provider Aramark Holdings Corp staged
a more impressive debut, up 10.2 percent at $22.04 after pricing
at $20 per share. The Philadelphia-based company was returning
to the market for the third time, after being taken private
first in 1984 and then again in 2006.