US stocks sink on retailer weakness, Greek debt

NEW YORK: US stocks tumbled Friday as investors weighed falling profits at clothing retailers Gap and Aeropostale and a downgrade on Greece's massive debt.

The Dow Jones Industrial Average slid 93.28 points (0.74 percent) to end the day at 12,512.04.

The broader S&P 500 dropped 10.33 points (0.77 percent) to 1,333.27, while the tech-heavy Nasdaq Composite shed 19.99 points (0.71 percent) at 2,803.32.

Both the Dow and the S&P 500 had posted gains the prior two days.

"Stocks ended the week on a down note, digesting the lower guidance due to higher input costs reported by retailers Gap Inc and Aeropostale, as well as continued worries about the eurozone debt crisis," Charles Schwab analysts said in a client note.

Eurozone debt worries again were in focus after Fitch Ratings slashed Greece's credit rating by three notches, citing the bailed-out country's massive challenges in fixing its finances.

Gap shares skidded 17.5 percent to $19.22. The struggling chain reported a 23 percent fall in first-quarter profit from a year ago, and warned that costing pressures were higher than expected and would "more than" outweigh retail price increases in the second half of the year.

Rival mall-based retailer Aeropostale, which also posted a lower quarterly profit, sank 14.2 percent to $18.30.

Shares in bookseller Barnes & Noble, approached by Liberty Media with a cash buyout bid at $17 a share, leaped 29.9 percent to $18.33. The takeover offer values the beleagured retailer at around $1 billion.

LinkedIn, the career-focused social-networking firm that more than doubled its share price in the first day of trade Thursday, slipped 1.2 percent to $93.09.

The bond market rose. The yield on the 10-year Treasury note slipped to 3.15 percent from 3.17 percent late Thursday, while that on the 30-year bond was nearly unchanged at 4.30 percent.

Bond prices and yields move in opposite directions.