NEW YORK - The stock market slumped to its second-biggest weekly loss of the year Friday, breaking six consecutive weeks of gains. Fears that the holiday shopping season will be a dud tanked retail stocks.
The Dow Jones industrial average dropped 202 points, or 1.2 percent, closing at 17,245. The Standard & Poor's 500 index gave up 22 points, or 1.1 percent, ending at 2,023. The Nasdaq composite fell 77 points, or 1.5 percent, to finish at 4,927.
The price of oil continued to slide on evidence that global supplies are continuing to rise. The dollar could get even stronger, further pressuring oil and other commodities and affecting mining and energy companies.
Department store operator Nordstrom retreated $9.51, or 15 percent, to close at $53.96, and watchmaker Fossil Group (FOSL) plunged $18.62, or 36.5 percent, to close at $32.39 after both companies announced weak third-quarter results and cut their forecasts for the year.
The holiday shopping season will kick into high gear with Black Friday in two weeks, and investors are becoming worried that the latest reports are signs that sales will be weak during the season, which is a crucial moneymaker for retail companies. Macy's and Nordstrom both hit two-year lows Friday. Consumer discretionary stocks were by far the worst performing group on the S&P 500.
JC Penney's results were about equal to analyst projections, but its stock lost $1.36, or 15.4 percent, to close at $7.43. Video game retailer GameStop sank $7.35, or 16.5 percent, to close at $37.18. Watchmaker Fossil Group plunged $18.62, or 36.5 percent, to close at $32.39. Fossil posted disappointing earnings Thursday afternoon and also said it will buy activity tracker maker Misfit for $260 million. Its shares hit their lowest level in five years.
U.S. retail spending edged up just 0.1 percent in October, a bit less than analysts expected. Prices charged by farmers, manufacturers and other producers fell in October. Both measurements show there is little sign of inflation in the U.S. economy. When inflation is higher, consumers have an incentive to spend more money.
Stifel Nicolaus analyst Richard Jaffe suggested the widespread selling was an overreaction. Shoppers will spend plenty of money this holiday season, he said, and while they're spending more money on smartphones and TVs and other big items than they used to, there will still be plenty of socks and sweaters given as gifts over the holidays.
"Christmas is boxed gifts," Jaffe said. "There will be a lot of gift giving, a lot of apparel sales."
Jaffe noted that Americans' shopping habits have changed a lot over the last few years. Consumers are making spending more on homes, cars, and vacations. Aging baby boomers don't buy clothes as often as they used to, and younger shoppers are more interested in technology.
Stocks rallied in October and had their best month in four years, but they've slipped back in November. The S&P 500 is now negative for 2015.
Economic growth in the countries that use the euro slowed in the third quarter. The figures were disappointing, but they're likely to encourage the European Central Bank to expand a program to stimulate Europe's economy.
In Europe, Britain's FTSE 100 dropped 1 percent, while France's CAC 40 lost 1 percent. Germany's DAX shed 0.7 percent.
U.S. crude slumped $1.01, or 2.4 percent, to $40.74 a barrel in New York. It's dropped about 13 percent this month and is at its lowest price since late August. Brent crude, which is used to price international oils, lost 45 cents, or 1 percent, to $43.61 a barrel in London.
Jim Ritterbusch of the oil trading firm Ritterbusch & Associates said crude could fall another $3 to $4 a barrel. It's gone as low as $37.75 this year.
In other energy trading, heating oil fell 2.5 cents to $1.381 a gallon. Wholesale gasoline dipped 3.4 cents to $1.239 a gallon. Natural gas edged up 10.1 cents to $2.361 per 1,000 cubic feet.
The price of gold fell 10 cents to $1,080.90 an ounce. Silver fell for the tenth day in a row, losing 2.1 cents to $14.20 an ounce. Copper dipped slightly to just under $2.17 a pound. All three metals are at their lowest levels in six years.
Commodities prices are skidding as the Federal Reserve gets ready to raise interest rates just as central banks in Europe and Japan consider new economic stimulus moves. Those moves would make the U.S. dollar stronger, making dollar-denominated commodities costlier to buyers using yen, euro and other currencies besides the dollar.
Shareholders of Irish drugmaker Perrigo (PRGO) rejected a $26 billion offer from generics maker Mylan (MYL) of the Netherlands. Perrigo fell $9.65, or 6.2 percent, to close at $146.90, and Mylan climbed $5.58, or 13 percent, to close at $48.78.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.27 percent from 2.31 percent late Thursday. The euro declined to $1.0751 from $1.0791, and the dollar edged up to $122.67 yen from 122.62 yen.