Retailers weigh on Wall Street rally

<!--StartFragment--> US stocks tumbled yesterday as a gloomy retail sales report revived recent anxiety about the economy&rsquo;s struggle and caused a broad sell-off that accelerated late in the session.<br /><br />Sales at retailers fell for a second straight month in April, breaking a string of more upbeat reports that had suggested the economic slump was abating and fuelling a two-month rally.<br /><br />Investors sold off shares across the board. Retailers fell, led by a nearly 5 per cent drop in <strong>Target</strong> while manufacturers, home builders and commodity companies stumbled.<br /><br />Retail activity is a closely followed indicator, as consumer spending accounts for roughly two-thirds of the US economy. Analysts had forecast no change or even a small increase in retail sales, excluding autos.<br /><br />The Dow Jones industrial average fell 184.22 points, or 2.18 per cent, to 8,284.89. The Standard &amp; Poor&rsquo;s 500 Index lost 24.43 points, or 2.69 per cent, to 883.92. The Nasdaq Composite Index gave up 51.73 points, or 3.01 per cent, to 1,664.19.<br /><br />The session was a stumbling block for the market after an impressive run-up that has driven the S&amp;P 500 sharply higher. The index remains up nearly 31 per cent from the bear market low hit in early March, but it was the third straight day of declines for the S&amp;P, making it the longest slump since the rally&rsquo;s onset.<br /><br />The S&amp;P is off 5 per cent from last Friday&rsquo;s recovery peak. Yesterday sell-off caused the S&amp;P 500 to breach some key technical support, ending below 900 for the first time in over a week.<br /><br />Shares of <strong>Wal-Mart</strong> the world&rsquo;s biggest retailer and a bellwether for the sector, fell 1.2 per cent to $50.03, while <strong>Target</strong> lost 4.8 per cent to $40.47. The S&amp;P retail index fell 3.3 per cent.<br /><br />In more bad news for the retail sector, department-store operator <strong>Macy&rsquo;s</strong> said it expects sales to fall this year as consumers tighten their belts, while <strong>Liz Claiborne</strong> reported a worse-than-expected loss. Shares of <strong>Macy&rsquo;s</strong> slid 6.7 per cent to $11.52 and <strong>Liz Claiborne</strong> plummeted 26.2 per cent to $4.26.<br /><br />Shares of big manufacturers also got hurt, with <strong>3M</strong> down 4.4 per cent at $56.94. <!--EndFragment-->