Stocks were mixed today after reports of unexpectedly strong retail sales and a soaring trade deficit reignited fears that interest rates will rise. The dollar continued to slip, adding to the pressure on stocks.
At 3 p.m., the Dow Jones industrial average was down 85.49 at 10,944.84. Earlier in the session, the Dow had dropped as much as 129 points.
Broader stock indicators had turned mixed. The Standard & Poor's 500 index was down 6.52 to 1,337.61, and the Nasdaq composite index gained 23.05 to 2,867.82, reversing an early decline.
Stocks tumbled today after the Commerce Department said retail sales surged 1.2 percent in August, the biggest increase in six months.
Also today, the Commerce Department said the U.S. trade deficit soared to a record $80.7 billion in the second quarter.
J.P. Morgan dropped 2 1/8 to 122 1 1/1 6, and American Express fell 2 5/1 6 to 137 1 5/1 6.
"Investors are trying to fill in pieces of the mosaic, trying to determine what the Fed will do," said Richard E. Cripps, chief market strategist for Legg Mason of Baltimore. "The market is not convinced that the economy lacks inflationary pressures."
Cripps said stocks will probably stay in a trading range until Oct. 5, when the Fed's policy-making committee holds its next meeting.
Herbalife International Inc.'s Class A shares rose 3 3/1 6 to 15 3/1 6. The seller of nutritional and weight-management products said founder and Chief Executive Mark Hughes plans to buy all the stock he doesn't already own for $486 million in cash. That's $17 a share for Class A and B shares, a 42 percent premium over Herbalife's closing price for Class A shares and 86 percent for Class B.
Qualcomm, up 15 5/8 to 169, helped turn the Nasdaq higher after officials of the wireless communications company said they expect to meet or exceed analysts' estimates that it will earn 87 cents a share in the fourth quarter.
Republic New York Corp. fell 1 1/8 to 58 7/8 on concern HSBC Holdings Plc will renegotiate the terms of its $10.3 billion takeover of the New York bank. Republic has a client who was charged with a $1 billion fraud.
Declining issues outnumbered advancers by an 8-to-3 margin on the New York Stock Exchange.