US stock market shows decline

Stocks declined moderately today as news of job cuts at Merck & Co. and a mixed holiday sales snapshot prompted Wall Street to take a breather from its recent five-week rally.

The market was coming off seven consecutive trading days of gains amid a year-end rally that vaulted the Standard & Poor’s 500 and Nasdaq composite indexes to four-year highs, fed by an improving economic landscape and mounting eagerness for strong sales in December.

But while some of the nation’s retailers reported a solid opening to the holiday shopping season, other merchants said shopper traffic tailed off once Friday’s bargains passed. Retail stocks fell despite Wal-Mart Stores Inc. and J.C. Penney Co. posting better-than-expected numbers.

Meanwhile, sharply lower oil prices did little to energize the market, although a recent slide in crude futures has helped temper fears about higher energy costs eating into consumer spending this winter.

Despite a clouded holiday retail sales outlook, Steve Neimeth, senior vice president and portfolio manager for AIG SunAmerica, said the broader picture remains positive.

“Bottom line, the consumer is extremely healthy and sentiment is good,” Neimeth said. “I believe they will be spending heavily this year, and that December retail sales will beat expectations.”

According to preliminary calculations, the Dow Jones industrial average lost 40.90, or 0.37%, to 10,890.72.

Broader stock indicators retreated from their highest levels since mid-2001. The S&P 500 slid 10.78, or 0.85 percent, to 1,257.47, and the Nasdaq fell 23.64, or 1.04 percent, to 2,239.37.