Dow Pares Losses, Closes Down 17.26

By KRISTINA PETERSON

Stocks posted modest losses after another earthquake rattled Japan's northeastern coast, but retailers climbed following strong March sales.

Paul Vigna explains why oil spiked to $110 a barrel for the first time since September 2008 and stocks ended lower following news of another major earthquake in Japan.

After dropping nearly 100 points immediately following reports of the 7.1-magnitude earthquake, the Dow Jones Industrial Average pared much of its losses after the danger from a tsunami dimmed. The index closed down 17.26 points, or 0.1%, at 12409.49.

The Nasdaq Composite shed 3.68 points, or 0.1%, to 2796.14, while the Standard & Poor's 500-stock index fell 2.03 points, or 0.2%, to 1333.51.

Traders said news of the Japanese earthquake startled the market and raised fears that another natural disaster could further slow the country's recovery from last month's crises. Officials at the Japanese nuclear agency said no troubles were reported at the power stations affected by the temblor.

"People remain concerned that Mother Nature and geopolitical events stay foremost in the headlines," said Tom Galvin, managing director and lead portfolio manager at Columbia Management.

Stocks had drifted between positive and negative territory earlier in the session, as investors digested the latest round of jobs data and a crop of strong same-store sales from retailers in March.

Consumers showed unexpected resilience in March, opening their pocketbooks despite a later Easter, poor weather and higher gasoline prices. Warehouse club Costco Wholesale climbed 3.8% after posting a rise in same-store sales, beating estimates. Limited Brands, operator of Victoria's Secret, gained 1.6% after same-store sales jumped well ahead of the increase forecast from analysts.

Kohl's added 0.9% after March sales at its stores open at least one year fell, but were slightly better than analysts' expectations.

Gap reported weak same-store sales for March and said its fiscal first-quarter earnings will miss Street estimates. The casual-apparel retailer said the recent natural disasters in Japan will hurt its profit in the period, sending shares down 1.5%. Target shed 2.6% after its March same-store sales fell.

Retailers' March sales were "not uniformly good," said Steve Sosnick, equity risk manager at Timber Hill LLC/ Interactive Brokers Group LLC. Traders are also trying to figure out how the market might react if politicians don't reach a deal on how to fund the government beyond the Friday night deadline.

Thursday's economic data provided another sign of improvement in the jobs market. Initial jobless claims decreased in the week ended April 2, the Labor Department said in its weekly report. The drop was bigger than the decline expected by economists. However, the prior week's figures were revised up.

Write to Kristina Peterson at kristina.peterson@dowjones.com