* Slump in Oct retail sales adds to economic worries
* Drumbeat of data signals more downside for stocks
* World leaders gathered in Washington for crisis talks
* Dow off 1.6 pct, S&P 500 off 2.2, Nasdaq off 2.7 pct
* For up-to-the-minute market news, please click on
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(Updates to afternoon, changes byline)
By Kristina Cooke
NEW YORK, Nov 14 (Reuters) - U.S. stocks fell on Friday
after a record drop in retail sales last month raised fears
that American consumers' reluctance to spend will push the
economy into a deeper downturn.
The market was unable to build on Thursday's dramatic
rebound as more negative economic and corporate data painted a
bleak picture.
Retail sales dropped 2.8 percent in October as consumers
curbed their spending amid recession fears, a government report
showed. Part of the drop was due to falling gas prices.
Consumer spending is a key driver for U.S. economic growth
and corporate profits. For details, see [].
Adding to the grim mood, J.C. Penney <JCP.N>, the
department store operator, and Abercrombie & Fitch <ANF.N>, a
clothing retailer for teens and young adults, gave
disappointing outlooks and said shoppers look like they will be
reining in spending this holiday season.
"Retail sales was abysmal, and guidance from retailers like
J.C. Penney and Abercrombie was pretty bleak," said Michael
James, senior trader at regional investment bank Wedbush Morgan
in Los Angeles.
"Without the participation from the retail sector, you're
not going to be able to get much sustainability to any rally,"
he added.
The Dow Jones industrial average <> fell 150.93
points, or 1.71 percent, to 8,684.32, while the Standard &
Poor's 500 Index <.SPX> dropped 21.55 points, or 2.36 percent,
to 889.74. The Nasdaq Composite Index <> was down 46.20
points, or 2.89 percent, at 1,550.50.
The looming Nov. 15 deadline for hedge fund redemption
calls -- a key date for investors to pull their money out of
hedge funds -- added to the selling, analysts said.
Dow component Boeing <BA.N> fell 3.3 percent to $41.75
after the planemaker delayed its latest version of its 747
jumbo by several months.
J.C. Penney and Abercrombie & Fitch shares slid after they
forecast profit for the current quarter sharply lower than
estimates.
J.C. Penney fell 9.4 percent at $17.46, while Abercrombie
dived 14.7 percent to $19.15. Their weak results echoed those a
day earlier from mid-priced retailer Kohl's Corp <KSS.N> and
upscale chain Nordstrom Inc <JWN.N>, which cut their full-year
forecasts.
An index of retail shares <.RLX> dropped 5.4 percent, while
Dow component Wal-Mart declined 2.1 percent to $53.84.
Home finance provider Freddie Mac <FRE.N> posted a $25.3
billion quarterly loss, signaling no let-up in the troubled
housing sector. The Dow Jones home construction index <.DJUSHB>
fell 2 percent.
On the Nasdaq, Sun Microsystems <JAVA.O> was up 3.9 percent
at $4.24 after the computer maker said it will slash as many as
6,000 jobs to mitigate the impact of faltering global demand.
Technology shares fell after cellphone maker Nokia
<NOK1V.HE> warned on its profit outlook. iPhone maker Apple
<AAPL.O> was the biggest drag on the Nasdaq, falling 5 percent
to $91.60, while chipmaker Qualcomm <QCOM.O> shed 4.6 percent
to $33.20.
In Thursday's rally, which was the biggest surge in two
weeks, Wall Street broke a three-day string of losses after the
S&P 500 and Nasdaq touched fresh five-year lows.
Leaders of the G20 industrialized and emerging nations were
meeting in Washington during the weekend to try to find
solutions to the world financial crisis, the worst in 80
years.
(Reporting by Kristina Cooke; Editing by Kenneth Barry)
