Stocks ended lower Tuesday after the government reported surprisingly weak retail sales figures.
The Commerce Department said retail sales rose for the seventh straight month in January, but the increase was the smallest since June. Retail sales rose just 0.3 percent, half of what economists had predicted.
Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group, said higher prices for gasoline and raw materials are beginning to be passed along to consumers. That's hurting retail sales and spending, she said.
"Without wage gains," she said, "people are going to buy less."
Energy companies led stocks lower. Exxon Mobil Corp. lost 2 percent, the largest drop for any of the 30 large companies that make up the Dow Jones industrial average. Exxon Mobil said it added 3.5 billion barrels of oil and gas last year to the company's massive reserves, more than twice what Exxon produced in 2010.
According to preliminary calculations, the Dow fell 41.55, or 0.34 percent, to 12,226.64.
The Standard & Poor's 500 index fell 4.30, or 0.32 percent, to 1,328.02. The Nasdaq composite index fell 12.83, or 0.0.46 percent, to 2,804.35.
The parent company of the New York Stock Exchange agreed to combine with the operator of the Frankfurt stock exchange, Deutsche Boerse AG, creating the world's largest financial markets company.
Shares of both companies fell after the deal was announced. NYSE Euronext's shares fell 3 percent in New York, while Deutsche Boerse's fell 2 percent in Frankfurt.
One of NYSE's biggest competitors, Nasdaq OMX Group Inc., fell 5 percent.
Limelight Networks Inc. jumped 31 percent after the provider of streaming video services narrowed its fourth-quarter loss and issued a better-than-expected forecast for the current quarter. The company is benefiting from consumers turning to the Internet to watch TV and movies; one of its customers is online video company Netflix Inc.
The Commerce Department also reported that businesses increased their inventories for a 12th consecutive month in December, indicating further gains in production at U.S. factories.