* Wal-Mart profit falls as harsh winter hampers shoppers
* Russell 2000 briefly off more than 10 pct from high
* J.C. Penney shares jump after the bell
* Dow off 1 pct; S&P 500 down 0.9 pct; Nasdaq down 0.8 pct
(Updates close with J.C. Penney, Nordstrom shares up after the
bell, adds volume)
By Caroline Valetkevitch
NEW YORK, May 15 U.S. stocks fell on Thursday,
giving the Dow and the S&P 500 their worst declines in more than
a month, as small-cap shares extended their retreat and Wal-Mart
The Russell 2000 index of small-cap stocks lost 0.7
percent, well off its session low where it hit correction
territory, down more than 10 percent from its early March record
close of 1,208.65. It ended down 9.3 percent from that high.
Thursday marked the second day of losses for the three major
U.S. stock indexes. Volume picked up on S&P 500 e-mini futures
, underscoring some views that the selling may not be
over. At 2.2 million, e-mini futures volume was well above the
1.5 million daily average for the past year.
Stocks are "starting to form a little bit of a ceiling,"
said Uri Landesman, president of Platinum Partners in New York,
"The small caps have really been selling off, and I think
you're continuing to see a rotation out of anything the market
Wal-Mart Stores Inc shares fell 2.4 percent to
$76.83, weighing on both the Dow and the S&P 500. The world's
largest retailer forecast second-quarter profit below analysts'
estimates. Wal-Mart reported its smallest growth in quarterly
sales in nearly five years and a drop in first-quarter profit,
saying that severe winter weather made it difficult for
customers to visit its stores.
The Dow Jones industrial average fell 167.16 points
or 1.01 percent, to end at 16,446.81. The S&P 500 lost
17.68 points or 0.94 percent, to 1,870.85. Both posted their
biggest daily percentage declines in slightly more than a month.
The Nasdaq Composite dropped 31.33 points or 0.76
percent, to 4,069.29.
With the Dow and the S&P 500 near record highs, the decline
in the Russell 2000 raised concern about the strength of the
The Russell 2000's move "either is a leading market
indicator or it could be a one-off ... and that's yet to be
determined," said Adam Sarhan, chief executive of Sarhan Capital
in New York.
The CBOE volatility index rose 8.2 percent, its
biggest one-day bounce in a little over a month. The spread
between the spot VIX and the 3-month VIX at one point
tightened to its smallest since April 15.
Adding to bearish views, billionaire hedge fund manager David
Tepper sounded cautious late Wednesday, saying he was "nervous"
about the stock market but that this was not the time to sell.
After the bell, shares of J.C. Penney Co Inc jumped
19 percent to $9.96 after the U.S. department store chain
reported results. Shares of Nordstrom Inc gained 9
percent to $67, also after its results.
During the regular session, Cisco Systems Inc
jumped 6 percent to $24.18, a day after the network equipment
maker posted a shallower-than-expected drop in quarterly
Economic data was mixed. U.S. industrial output fell at its
fastest rate in more than 1-1/2 years in April, while initial
claims for U.S. jobless benefits hit a seven-year low last
About 6.8 billion shares changed hands on U.S. exchanges,
above the 6 billion month-to-date average, according to data
from BATS Global Markets.
(Editing by Chizu Nomiyama, Nick Zieminski and Jan Paschal)