3 Min Read
* Macy's profit plunges, drags down retail stocks
* Snap Inc plummets on disappointing revenue, user growth
* All 11 S&P sectors in the red
* Indexes down: Dow 0.12 pct, S&P 0.24 pct, Nasdaq 0.22 pct (Updates to afternoon)
By Noel Randewich
May 11 (Reuters) - U.S. stocks fell on Thursday after worse-than-expected sales drops at Macy's and Kohl's sparked a selloff in shares of department stores and stirred fears that consumers are not spending enough to drive strong economic growth.
Macy's dismal quarterly performance sent its shares tumbling 15 percent, taking a toll on the consumer discretionary sector, which fell 0.56 percent.
Kohl's dropped 6.2 percent after it reported a drop in quarterly sales, while shares of Nordstrom and J.C. Penney Co Inc each dropped more than 7 percent.
The weak corporate reports left investors looking to April retail sales data due out on Friday for signs of whether consumers are simply shifting their spending habits away from department stores, or just aren't spending.
"It's a gut check about the health of the consumer," said Phil Blancato, Chief Executive of Ladenburg Thalmann Asset Management. "It's a canary in the coalmine moment."
All of the 11 major S&P sectors were lower. Financials fell 0.39 percent, weighed down by a 1.5-percent loss in Wells Fargo.
"Any market pullback, if orderly, (is) healthy as long as the underlying fundamentals for the market are strong," said Matthew Peterson, chief wealth strategist at LPL Financial in Charlotte, North Carolina.
At 2:44 pm ET, the Dow Jones Industrial Average was down 0.12 percent to 20,918.15 points and the S&P 500 had lost 0.24 percent to 2,393.91.
The Nasdaq Composite dropped 0.22 percent to 6,115.44.
Shares of Snap Inc plunged 21 percent after the Snapchat owner reported a slowdown in user growth and revenue in its first earnings report as a publicly-listed company.
Straight Path fell 20 percent after it agreed to be taken over by Verizon in a $3.1 billion deal, snubbing a rival offer from AT&T.
Merck rose 1 percent after the U.S. FDA cleared its lung cancer combination treatment.
Declining issues outnumbered advancing ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favored decliners.
The S&P 500 posted 13 new 52-week highs and 9 new lows; the Nasdaq Composite recorded 82 new highs and 57 new lows. (Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Nick Zieminski)