* JP Morgan, Wells Fargo shares fall after results
* Retail sales unexpectedly drop
* Investors lock in gains after record highs
* Indexes down: Dow 0.3 pct, S&P 0.5 pct, Nasdaq 0.4 pct
By Leah Schnurr
NEW YORK, April 12 Wall Street declined on
Friday, pulling back from record levels set a day earlier, after
retail sales unexpectedly dropped last month and as results from
major banks failed to impress investors.
Data showed retail sales fell 0.4 percent in March, while
February's strong gain was revised down slightly. Consumer
spending plays a key role in the U.S. economy, accounting for
two-thirds of activity.
Another report showed consumer sentiment fell to a
nine-month low in early April amid gloom about the long-term
health prospects for the U.S. economy.
Investors have been rattled by indications economic growth
could be softening, particularly after last week's disappointing
jobs number, though that had not derailed the market rally so
Still, some profit taking in the market was not unexpected a
day after the Dow and benchmark S&P 500 closed at record highs.
For the year, the Dow has gained more than 13 percent and the
broader S&P is up over 11 percent.
"That is something sitting in the back of a lot of
investors' minds that we should have some pullback, whether it's
short term or a bit longer term," said Tim Ghriskey, chief
investment officer of Solaris Group in Bedford Hills, New York.
"We think there are a lot of people sitting on the sidelines
waiting for those pullbacks to jump into the markets, which
means it's likely any pullback will be short and shallow."
The Dow Jones industrial average dropped 36.79
points, or 0.25 percent, to 14,828.35. The Standard & Poor's 500
Index fell 7.16 points, or 0.45 percent, to 1,586.21. The
Nasdaq Composite Index lost 11.57 points, or 0.35
percent, to 3,288.59.
The advance in equities in recent months was partly buoyed
by the Federal Reserve's economic stimulus efforts, and analysts
are viewing the first-quarter earnings season as a test for
whether those gains are justified by corporate performance.
JP Morgan Chase and Wells Fargo were the
biggest companies to report so far as earnings season got
underway. Shares of both fell and the financial sector
lost 0.5 percent.
JP Morgan reported higher first-quarter profit, though
revenue declined; its stock was off 0.3 percent to $49.16.
Wells Fargo's profit was better-than-expected but it made
fewer home loans. Its shares were down 1.6 percent at
Earnings for S&P 500 companies are expected to grow at a
modest 1.2 percent in the first quarter, down from more than 4
percent forecast in January, according to Thomson Reuters data.