* Latest China data points to slowing economy
* Ukraine tensions continue, Merkel warns Russia
* Initial claims fall, retail sales tops estimate
* Indexes off: Dow 0.42 pct, S&P 0.32 pct, Nasdaq 0.42 pct
By Chuck Mikolajczak
NEW YORK, March 13 U.S. stocks edged lower on
Thursday as earlier gains spurred by better-than-expected data
on retail sales and the labor market were offset by worries over
Ukraine and the health of China's economy.
Weekly initial jobless claims fell 9,000 to a seasonally
adjusted 315,000, marking a fresh three-month low and better
than the forecast 330,000 new claims. Retail sales for February
rose 0.3 percent, slightly more than the 0.2 percent estimated
and ending two straight months of declines, although the prior
month was revised lower.
In addition, import prices increased 0.9 percent last month,
the biggest rise since February last year, with little sign of a
broad pick-up in imported inflation.
Investors have discounted many economic numbers that have
fallen short of expectations recently, attributing the weakness
to a harsh winter across much of the country. Economic activity,
evidenced by such data as retail sales, is expected to improve
as the weather warms.
Still, with the benchmark S&P index near record highs,
investors may be looking for evidence of stronger economic
progress to justify further gains.
"You look at the retail sales today and they are not ideally
what they would be but we can still kind of blame that on the
weather," said Brad McMillan, chief investment officer of
Commonwealth Financial in Waltham, Massachusetts.
"It's not that things are terrible, it's just it is not
going to be as good as everybody thinks it is right now and that
is the adjustment we are making."
China's economy slowed markedly in the first two months of
the year, as growth in investment, retail sales and factory
output all fell to multi-year lows.
Tensions in Ukraine continued to flare. Germany's Angela
Merkel warned Moscow it risked "massive" political and economic
damage if it refused to change course on Ukraine, saying Western
leaders were ready to impose sanctions on Russia if necessary.
Russia said it had started military exercises near the
border with Ukraine, in what is likely to be seen as a show of
force in the standoff with the West over the Crimea
"You've got the economic consequences to Russia and other
emerging markets coming along. A lot of the risk reduction in
Europe was based on the fact things are steady there and that is
being called into question," said McMillan.
The Dow Jones industrial average fell 68.75 points,
or 0.42 percent, to 16,271.33, the S&P 500 lost 5.92
points, or 0.32 percent, to 1,862.28 and the Nasdaq Composite
dropped 18.303 points, or 0.42 percent, to 4,305.028.
In the last piece of economic data on Thursday, business
inventories rose 0.4 percent, in line with expectations, but a
drop in sales meant it was now taking the longest time since
late 2009 to move goods from shelves.
Amazon.com Inc rose 2.5 percent to $380 as the best
performer on the S&P 500 after the Internet retailer told
customers on Thursday that the annual membership fee for its
Prime shipping and media streaming service would go up to $99
from $79 next week.
Dollar General Corp lost 2.8 percent to $57.63 after
the discount retailer posted lower-than-expected sales for the
Venaxis Inc surged 25 percent to $3.39 after the
company said its appendicitis test correctly predicted results
in 97 percent of patients in a clinical trial.