Stocks continued to lose ground Friday as worries about the European debt crisis overshadowed somewhat encouraging US economic data.
Financials, materials and techs were the biggest decliners, pushing investors into safer plays like consumer staples.
US consumer sentiment edged up in May, in line with forecasts, while one-year inflation expectations were at their highest since June 2009. Meanwhile retail sales rose 0.4 percentin April, weaker than the month before, while core sales—which exclude autos, gasoline and building materials—fell 0.2 percent.
Separate reports showed industrial production rose 1 percent last month and business inventories climbed 0.4 percent in March.
"The emphasis of the markets right now is on the risks rather then the good news that's coming out of the economic numbers," Peter Dixon, senior economist at Commerzbank, told CNBC.
The Dow Jones Industrial Average was down more than 100 points, after losing 114 on Thursday. Still, the blue-chip index is higher for the week by a few hundred points.
And the CBOE volatility index, widely considered the best gauge of fear in the market, popped above 30, after falling to near 20 in the past few sessions.
The Dow chalked up its 10th triple-digit move, either up or down, during Thursday's session. That followed a period of approximately a month-and-a-half when the Dow registered only three triple-digit moves.
European stocks were lower across the board as the tough austerity measures introduced by a growing number of euro zone countries led to growth fears. Asian stocks ended mixed but mostly lower.
The dollar hit an 18-month highagainst the euro, while oiland gold both fell.
Caterpillar , Intel and Hewlett-Packard were the biggest decliners on the Dow.
Procter & Gamble and Walmart were among the only Dow gainers.
Retailer JC Penney reported its profit rose but delivered a weak outlook.
That came after cautious outlooks from fellow department-store operators Kohl's and Nordstrom .
After the bell Thursday, chipmaker Nvidia beat earnings per share estimates by two cents in its latest quarter, while computer software makerCA fell short of consensus.
Videogame industry tracker NPD reported the worst year-over-year decline for videogame sales since last July, and the fourth largest ever such decline.
And Sony shares fell in overseas trading, after the company's annual profit forecast fell short of consensus by 23 percent.
BP shares slipped as the company continued to struggle to contain the giant oil spill in the Gulf of Mexico. The latest effort involves underseas robots threading a tube into the pipeto pump the oil into tankers above the surface.
The latest hint of possible trouble for Wall Street banks is detailed in the Wall Street Journal this morning, which reports that the Securities and Exchange Commission is investigating whether the banks used their own money to bet against municipal bonds that they had sold.
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