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Retail figures push down US stocks
The Dow Jones industrial average closed down 47 points at 12,897
Stocks have closed mostly lower on Wall Street after signs emerged that Americans are spending at a slower pace and that China's economy may be in worse shape than previously thought.
American shoppers slowed their spending in June, resulting in tepid sales for many retailers. Target's stock fell 1% and Costco Wholesale fell less than 1% after reporting that sales rose less than analysts were expecting.
"It all boils down to one little word: uncertainty," said Peter Cardillo, chief market economist at Rockwell Global Capital. "No-one will spend if it feels like we're in a recession."
The reports raised concerns about Americans' ability to spend during the back-to-school shopping season, which starts later this month - a crucial period for retailers.
The Dow Jones industrial average closed down 47.15 points at 12,896.67. The Standard & Poor's 500 fell 6.44 points to 1,367.58 and the Nasdaq composite was 0.04 points higher at 2,976.12.
Eight of the 10 major industries tracked by the S&P 500 fell, led by bank stocks. JPMorgan Chase fell 1.50 dollars, or 4%, to 34.38 dollars, while Bank of America fell 24 cents, or 3%, to 7.82 dollars.
China surprised investors when it cut interest rates for the second time in a month. That caused investors to worry that the downturn in the world's second-largest economy may be worse than previously expected.
The People's Bank of China cut its main lending rate 0.31 percentage point to 6% and reduced its deposit rates by a quarter of a percentage point to 3%. The bank said the lower rates are intended to boost economic growth in the second half of the year. Analysts said the cuts are also a sign that Chinese authorities are increasingly concerned about that country's economy.
As the largest buyer of raw materials, a slowdown in China can hurt sales at a wide range of companies and cause commodities prices to weaken. Crude oil fell 44 cents to 87.22 dollars per barrel, and copper lost 4.7 cents to 3.493 dollars a pound.
Central banks in Europe also moved to stem a slowdown there. The Bank of England approved a £50 billion injection into the ailing British economy, while the European Central Bank cut its main interest rate by a quarter of a percentage point to 0.75%, the lowest it has been since the bank was established in 1999.
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