MARKET SNAPSHOT: U.S. Stocks Fall; S&P 500 Down For Third Day

By Dow Jones Business News, 

MARKET SNAPSHOT: U.S. Stocks Fall; S&P 500 Down For Third Day

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market fell on Thursday, as a spike in oil prices and softer-than-expected economic data dented sentiment on Wall Street.

As unrest in Iraq intensified, concerns over supply sent crude oil prices soaring. While energy companies benefited from higher oil prices, airline companies were hit hard.

Economic data came in below analysts' forecast, weighing on sentiment. Weekly jobless claims ticked up, rather than the slight drop that was expected. Retail sales in May rose by less than forecast; however, the increase in April was revised sharply upward.

The S&P 500 (SPX) fell for the third straight session, closing 13.77 points, or 0.7%, lower at 1,930.12.

The Dow Jones Industrial Average (DJI) built on Wednesday's losses and finished 109.69 points, or 0.7%, lower at 16,734.19. The last time the blue-chip index fell for two consecutive sessions was almost a month ago.

The Nasdaq Composite (RIXF) ended the day down 34.30 points, or 0.8% at 4,297.63.

Read the recap of MarketWatch's live blog of today's stock-market action.

Joe Peta, managing director at Novus, a financial technology company, said that economic data, even when it meets expectations, is not good enough.

"Wall Street's expectations for growth acceleration in the second half of the year are too optimistic and we are just not seeing that in data so far," Peta said.

The number of Americans who applied for unemployment benefits last week increased slightly but remained near a post- recession bottom, indicating little change in a gradually improving U.S. labor market.

Sales at U.S. retailers rose last month on strong demand for cars, trucks and home-improvement products, but spending tapered off at many other retailers after a big bump in demand in April.

In corporate news, shares of Lululemon Athletica Inc. (LULU) slumped 16% after the maker of high-end yoga gear lowered its outlook for the year and reported a drop in profit for the first quarter.

Restoration Hardware Holdings Inc. (RH) surged 13% after the upscale home-furnishing retailer late Wednesday reported it swung to first-quarter profit from a loss a year ago.

Land's End Inc. ( LE ) shares rallied 8.2% after the retailer said profit rose nearly 50% in its first quarter as an independent company after being spun off from Sears Holdings Corp. (SHLD)

Shares in airline companies, hit badly on Wednesday following a profit warning from Deutsche Lufthansa AG, tumbled again on Thursday because of higher oil prices. Delta Air Lines, Inc ( DAL ) dropped 5.4%. Southwest Airlines Co. (LUV) fell 4.5%, American Airlines Group, Inc. ( AAL ) lost 4.9%.

Energy companies, which also tend to react to price swings in oil, rallied on Thursday. Denbury Resources Inc ( DNR ) was up 1.9%, Chesapeake Energy Corporation ( CHK ) rose 1.5%.

In other financial markets, Asian stocks closed mostly lower, while European equities finished little changed. Gold (GCQ4) rose.

Crude oil futures topped $106 a barrel on Thursday, with the U.S. benchmark marking its highest close in almost nine months as unrest in Iraq intensified, raising concerns about potential disruptions to the nation's oil supplies.

More must-reads from MarketWatch:

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This article appears in: Energy , US Markets , Economy , Commodities

Referenced Stocks: AAL , CHK , DAL , DNR , LE

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