Stocks fall as retail sales data disappoint

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Wall Street slid early Tuesday after an unexpected drop in retail sales tested a notion that the economy is starting to find its footing.

The poor showing for retail sales in March overshadowed better-than-expected profit reports from Johnson & Johnson and Goldman Sachs Group Inc.

In midmorning trading, the Dow Jones industrial average fell 78.69, or 1 percent, to 7,979.12.

Broader market measures also lost ground. The Standard & Poor's 500 index fell 8.03, or 0.9 percent, to 850.70, and the Nasdaq composite index fell 11.97, or 0.7 percent, to 1,641.34.

Financial stocks showed some of the steepest losses even after Goldman's results came in well ahead of what analysts had been expecting. Citigroup Inc. and JPMorgan Chase & Co. are also due to report quarterly results this week.

Federal Reserve Chairman Ben Bernanke's assertion Tuesday there have been "tentative signs" of easing in the recession appeared to keep some investors from hitting the "sell" button. Stocks have surged for five weeks as traders bet that banks are working through some of their biggest troubles and the economy's woes aren't worsening.

Wall Street couldn't avoid disappointment over the Commerce Department's report that retail sales fell 1.1 percent in March, the biggest drop in three months. Analysts polled by Thomson Reuters had expected an increase of 0.3 percent. In one bright spot, February retail sales were revised to show modest growth rather than the slight dip originally reported.

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