April 14 (Bloomberg) -- U.S. stocks retreated, halting a three-day advance, as unexpected declines in retail sales and producer prices offset optimism from Federal Reserve Chairman Ben S. Bernanke that the economy’s slump may be slowing.
Goldman Sachs Group Inc. fell 5.6 percent after selling shares to help repay $10 billion of government bailout funds. JPMorgan Chase & Co. and American Express Co. lost at least 2.4 percent as financial shares posted the steepest decline among 10 groups. Home Depot Inc. and Macy’s Inc. dropped at least 2 percent as economic data showed job losses forced consumers to cut back spending.
The Standard & Poor’s 500 Index dropped 1 percent to 850.26 at 11:56 a.m. in New York. The index closed at the highest level since Feb. 9 yesterday amid optimism that bank profits rebounded in the first quarter. The Dow Jones Industrial Average decreased 74.47 points, or 0.9 percent, to 7,983.34.
“The problem with the market is that we’ve had such a big move and the excitement may have gotten ahead of itself,” said Eric Green, director of research at Penn Capital Management, which oversees $3 billion in Cherry Hill, New Jersey. “The economy is certainly not in good shape.”
Europe’s Dow Jones Stoxx 600 Index increased 1.6 percent as bank shares rallied. The MSCI Asia Pacific Index climbed 1.3 percent, advancing for a fourth day.
Today’s drop trimmed the S&P 500’s advance from a 12-year low on March 9 to less than 26 percent. The surge was spurred by lenders from Citigroup Inc. to JPMorgan Chase & Co. saying they made money at the beginning of 2009 and Treasury Secretary Timothy Geithner’s plan to finance as much as $1 trillion in purchases of illiquid real-estate assets from banks.
Earnings Watch
Citigroup, JPMorgan and General Electric Co. are among the 31 S&P 500 companies scheduled to announce results this week. Profits probably decreased for a seventh straight quarter in the January-to-March period, the longest stretch of declines since at least the Great Depression.
Goldman Sachs fell 5.6 percent to $122.83. The sixth- largest U.S. financial institution said it priced 40.65 million shares at $123 each. It also reported first-quarter profit of $3.39 a share, beating the average analyst estimate by $1.64.
Morgan Stanley, scheduled to give quarterly results next week, slid 6.6 percent to $25.12. A measure of financial stocks in the S&P 500 slipped 2.3 percent.
Discover Financial Services retreated 4.5 percent to $8.07. The credit-card lender that got $1.2 billion from the Treasury said it will cut 4.2 percent of its workforce next month amid rising loan losses and lower consumer spending.
Retail Sales Slump
Home Depot, the largest home-improvement retailer, fell 2 percent to $25.43. Macy’s, the second-biggest U.S. department- store chain, tumbled 7 percent to $12.03.
U.S. retail sales fell 1.1 percent in March, the Commerce Department said. Economists forecast a 0.3 percent increase, according to the median estimate in a Bloomberg survey. Auto dealers, electronics stores and restaurants led the decline.
Prices paid to U.S. producers dropped 1.2 percent after two months of gains, indicating the recession is keeping inflation under control, according to the Labor Department. Economists projected no change.
Johnson & Johnson advanced 1.8 percent to $52.07. The world’s largest maker of health-care products announced first- quarter profit that beat analysts’ estimates with the help of job cuts and sales of consumer products, led by Listerine mouthwash and Neutrogena skin cleansers.
To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.
