US STOCKS-Wall St edges lower after gloomy retails, jobs data

                                
 * Gloomy retail sales, jobs data hurt sentiment
                                
 * Better-than-expected Wal-Mart results cap losses
                                
 * Financials up: Bank of America, Citi gain
                                
 * Stocks off: S&P 0.21 pct, Dow 0.34 pct, Nasdaq 0.21 pct
                                
 * For up-to-the-minute market news click [STXNEWS/US]
(Updates to early morning)
                                
 By Angela Moon
                                
 NEW YORK, Aug 13 (Reuters) - U.S. stocks edged lower on
Thursday as gloomy government reports on retail sales and
employment undercut hopes that the economy was on the road to
recovery.
                                
 But the overall decline was capped by Wal-Mart Stores Inc's
better-than-expected quarterly results, which pushed shares of
the world's largest retailer up 1.3 percent.
                                
 Retail stocks were one of the top drags, with the S&P
consumer discretionary sector index <.GSPD> down 1.34 percent.
A U.S. Commerce Department report showed total retail sales
fell 0.1 percent in July when market forecasts called for a 0.7
percent gain.
                                
 Department store chain Kohl's Corp <KSS.N> fell 2.74
percent to $50.84 after reporting a quarterly outlook before
the bell that was below Wall Street's forecasts.
                                
 Also unexpected was the rise in the number of workers
filing new claims for jobless benefits, which had been expected
to drop.
                                
 "Initial jobless claims and retail sales took a little bit
of the air out of the rally here," said Alan Lancz, president
of Alan B. Lancz & Associates Inc. in Toledo, Ohio.
                                
 "One of the concerns for the market continuing the rally
is, 'Is the consumer going to come back?' If that doesn't
materialize, the market might be leading up to some
disappointment."
                                
 Financial stocks gained, with Bank of America Corp <BAC.N>
rising 3.6 percent to $16.51 on news that hedge fund manager
John Paulson, who made a fortune betting against financial
companies after foreseeing the credit crisis, had stocked up
the bank's shares during the second quarter. For details, see
[ID:nN12401520]
                                
 Citigroup Inc <C.N> was up 2.26 percent to $4.07 and
Regions Financial Corp <RF.N> gained 4.98 percent to $5.06. The
S&P financial sector index <.GSPF> was up 0.9 percent.
                                
 In the tech-heavy Nasdaq index, Apple Inc <AAPL.O> rose
1.28 percent to $167.40 after Barclays Capital raised its price
target on the shares, citing upbeat long-term outlook for the
company.
                                
 The Dow Jones industrial average <.DJI> was down 40.81
points, or 0.44 percent, at 9,320.80. The Standard & Poor's 500
Index <.SPX> was down 3.63 points, or 0.36 percent, at
1,002.18. The Nasdaq Composite Index <.IXIC> was down 6.77
points, or 0.34 percent, at 1,991.95.
                                
 U.S. stocks powered higher on Wednesday after reassuring
comments from the Federal Reserve, erasing losses from earlier
in the week.
  (Additional reporting by Leah Schnurr; Editing by Padraic
Cassidy)