NEW YORK — The stock market slumped to its second-biggest weekly loss of the year Friday, breaking a streak of six consecutive weeks of gains. Fears that the holiday shopping season will be a dud tanked retail stocks.
Retailers ranging from department stores to dollar stores plunged after Nordstrom posted disappointing third-quarter results, just as Macy's did last week.
The price of oil continued to slide on evidence that global supplies still are rising. The dollar could get even stronger, further pressuring oil and other commodities and affecting mining and energy companies.
The Dow Jones industrial average fell 202.83 points, or 1.2 percent, to 17,245.24. The Standard & Poor's 500 gave up 22.93 points, or 1.1 percent, to 2,023.04. The Nasdaq composite index slipped 77.20 points, or 1.5 percent, to 4,927.88.
Concerns about retail sales and skidding commodities prices have eroded the gains from October's big stock market rally. Stocks have now lost ground seven of the past eight days. Overall the S&P 500 is down almost 2 percent for the year.
Nordstrom sank $9.51, or 15 percent, to $53.96 after reporting weaker sales. The company also cut its forecast for the year. Macy's had done the same on Wednesday.
The holiday shopping rush will kick into high gear with Black Friday in two weeks.
Following several weak reports from retailers, investors are becoming worried that sales will be poor during that period, 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 in the S&P 500.
J.C. Penney's results were about equal to analyst projections, but its stock lost $1.35, or 15.4 percent, to $7.44. Video game retailer GameStop sank $7.35, or 16.5 percent, to $37.18. Watchmaker Fossil Group plunged $18.62, or 36.5 percent, to $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.
Compounding those worries was a government report showing that U.S. retail spending edged up 0.1 percent in October, a bit less than analysts expected.
Prices charged by farmers, manufacturers and other producers fell in October. The figures 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 past few years. Consumers are 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.