* Retail sales data worse than expected
* Economic worries spark broad sell-off
* Macy's says expects sales to fall this year
* Dow off 2.2 pct, S&P off 2.7 pct, Nasdaq off 3 pct
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(Adds context on S&P and volume figures)
By Leah Schnurr
NEW YORK, May 13 (Reuters) - U.S. stocks tumbled on
Wednesday as a gloomy retail sales report revived recent
anxiety about the economy's struggle and caused a broad
sell-off that accelerated late in the session.
Sales at retailers fell for a second straight month in
April, breaking a string of more upbeat reports that had
suggested the economic slump was abating and fueling a
two-month rally.
Investors sold off shares across the board. Retailers
fell, led by a nearly 5 percent drop in Target <TGT.N>, while
manufacturers, home builders and commodity companies
stumbled.
Retail activity is a closely followed indicator, as
consumer spending accounts for roughly two-thirds of the U.S.
economy. Analysts had forecast no change or even a small
increase in retail sales, excluding autos. (For details,
double-click[])
"You want to see the consumer be a strong part of the
recovery and if retail sales lag, that calls into question
whether we're in a recovery yet and how sustainable that
recovery is going to be," said Richard Sparks, senior equities
analyst at Schaeffer's Investment Research in Cincinnati.
The Dow Jones industrial average <> fell 184.22
points, or 2.18 percent, to 8,284.89. The Standard & Poor's
500 Index <.SPX> lost 24.43 points, or 2.69 percent, to
883.92. The Nasdaq Composite Index <> gave up 51.73
points, or 3.01 percent, to 1,664.19.
S&P'S SLIDE BELOW 900
The session was a stumbling block for the market after an
impressive run-up that has driven the S&P 500 sharply higher.
The index remains up nearly 31 percent from the bear market
low hit in early March, but it was the third straight day of
declines for the S&P, making it the longest slump since the
rally's onset.
The S&P is off 5 percent from last Friday's recovery
peak.
Wednesday's sell-off caused the S&P 500 to breach some key
technical support, ending below 900 for the first time in over
a week.
"We are coming into a good support area in the S&P 500 on
870 to 875, which was the last breakout before the move to
930," said Elliot Spar, market strategist with Stifel Nicolaus
& Co in Shrewsbury, New Jersey.
"I think on Thursday,. it will try and make a stand there.
If it doesn't, that's going to panic a lot of guys who got in
late."
TIGHTER BELTS BRUISE RETAILERS
Shares of Wal-Mart <WMT.N>, the world's biggest retailer
and a bellwether for the sector, fell 1.2 percent to $50.03,
while Target lost 4.8 percent to $40.47. The S&P retail index
<.RLX> fell 3.3 percent.
In more bad news for the retail sector, department-store
operator Macy's Inc <M.N> said it expects sales to fall this
year as consumers tighten their belts, while Liz Claiborne Inc
<LIZ.N> reported a worse-than-expected loss. [].
Shares of Macy's slid 6.7 percent to $11.52 and Liz
Claiborne plummeted 26.2 percent to $4.26.
Shares of big manufacturers also got hurt, with 3M Co
<MMM.N> down 4.4 percent at $56.94 and United Technologies
Corp <UTX.N> off 3.5 percent at $50.61.The NYSE-listed
companies ranked among the top drags on the Dow industrials.
Apple Inc <AAPL.O>, the iPod and iPhone maker and yet
another company dependent on consumers opening their wallets,
was off 4 percent at $119.49 on Nasdaq. Apple contributed the
most to the Nasdaq's decline.
Investors also pulled cash out of the financial sector,
which has helped lead the recent rally, in favor of more
defensive plays, such as drugmakers.
Dow components Merck & Co Inc <MRK.N> added 2.8 percent to
$25.67, while Pfizer Inc <PFE.N> climbed 2.3 percent to
$15.27. Both helped cushion the blue-chip average's decline.
Shares of AMD <AMD.N> rose 0.7 percent to $4.38 after EU
regulators fined Intel Corp <INTC.O> for antitrust violations
and ordered it to halt illegal practices to squeeze out its
rival. Intel eased 0.5 percent to $15.13. [].
Trading was active on the New York Stock Exchange, with
about 1.77 billion shares changing hands, above last year's
estimated daily average of 1.49 billion, while on Nasdaq,
about 2.37 billion shares traded, above last year's daily
average of 2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by
2,745 to 337, while on the Nasdaq, decliners beat advancers by
about 2,294 to 395.
(Additional reporting by Ellis Mnyandu; Editing by Jan
Paschal)
