Stocks slip in afternoon trading; oil prices surge

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By AP

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Updated: Thu, 12 Jun 2014 01:15:26 EST

NEW YORK (AP) — U.S. stocks edged lower in early afternoon trading on Thursday after a report showed that retail sales rose less than forecast in May. A separate report showed that more Americans filed for unemployment benefits last week. The price of oil surged amid renewed violence in Iraq.

KEEPING SCORE: The Dow Jones industrial average fell 50 points, or 0.3 percent, to 16,793 as of 12:30 p.m. Eastern time. The Nasdaq slipped 11 points, or 0.2 percent, to 4,321. The Standard & Poor's 500 was down five points, or 0.3 percent, to 1,938.

A lower S&P 500 at the close would make three down days in a row for the broad index. The last time that happened was two months ago.

NEWS ON THE ECONOMY: U.S. retail sales rose for a fourth straight month in May, but the growth was slightly below economists' forecasts. The Commerce Department said consumer spending rose 0.3 percent last month, helped by a surge in auto demand, but shy of the 0.4 percent increase that economists expected.

The Labor Department said that weekly applications for unemployment benefits rose 4,000 to a seasonally adjusted 317,000.

THE QUOTE: "The data today was a little unfulfilling," said Lawrence Creatura, a portfolio manager at Federated Investors. Still, he's optimistic in the face of selling today, partly because he believes the job market will continue to strengthen. "We're definitely not flinching. We're holding our positions."

NO-GO YOGA: Lululemon Athletica fell $6.50, or 15 percent, to $37.80 after reporting first-quarter profit tumbled 60 percent, stung by a one-time tax adjustment. The Canadian yoga-clothing company also lowered its full-year earnings forecast.

RESTORATION RISE: Restoration Hardware jumped $9.51, or 13 percent, to $80.86 after the furniture and housewares company reported stronger-than-expected results in its fiscal first quarter and raised its outlook for the year, topping Wall Street's prediction.

POWER SURGE: Energy stocks rose broadly — the only sector in the S&P 500 that was higher in early afternoon trading — on fear that insurgent victories in Iraq could disrupt global oil supplies. The price of oil rose by $1.51, or 1.5 percent, to $105.91.

Diamond Offshore Drilling rose $1.65, or 3.5 percent, to $48.53. Exxon Mobil climbed 47 cents, or 0.5 percent, to $102.42.

AIRLINES FALL: A combination of higher oil prices and a warning by Lufthansa of smaller profits due to weaker passenger demand helped push airline stocks down sharply. Delta Air Lines fell $2.13, or 5 percent, to $38.58. Southwest Airlines dropped $1.19, or 4.4 percent, to $25.75.

BONDS: The yield on the 10-year Treasury note, which moves in the opposite direction to its price, slipped to 2.62 percent from 2.64 percent on Wednesday.

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