Stocks head lower on Wall Street, led by banks

NEW YORK - The stock market sank Thursday following a disappointing report on Americans' spending last month. Bed Bath & Beyond and banks were among the biggest losers.

The Dow Jones industrial average fell 80 points at 16,787 as of 12:58 p.m. ET. The Standard & Poor's 500 index sank nine points to 1,951, while the Nasdaq composite index fell 19 points, or 0.4 percent, to 4,361.

The government said the number of Americans seeking unemployment benefits declined last week, the latest evidence that an economic slowdown earlier this year hasn't caused employers to shed workers. In a separate report, the government said consumer spending inched up 0.2 percent last month, half the increase that economists had predicted.

"The spending data was a soft, but it's not that big of a deal," said Phil Orlando, chief equity strategist at Federated Investors.

Orlando said the stock market has been rising a little too fast recently, so a slight drop in the summer months wouldn't come as a surprise. "I fully expect to see a hiccup here, but I wouldn't get too worried about it," he said. "It's probably going to set us up for a nice end-of-the-year rally."

Barclays fell after New York's attorney general sued the British bank, claiming that it favored high-frequency traders over large institutions in its private-trading platform, known as a "dark pool." Eric Schneiderman accused Barclays of misleading investors by saying they were safe from predatory high-frequency traders. Barclays' U.S.-listed shares fell 97 cents, or 6 percent, to $14.74.

Other banks that operate similar private-trading platforms also dropped. Morgan Stanley sank 64 cents, or 2 percent, to $69.75. Citigroup slipped 63 cents, or 1 percent, to $47.20.

Bed Bath & Beyond sank 9 percent, the biggest loss in the S&P 500, after the company posted quarterly earnings and sales late Wednesday that fell short of analysts' estimates. The store's stock dropped $5.26 to $55.85.

GoPro jumped 32 percent in its stock-market debut. The company, whose cameras get strapped to the heads of skydivers, extreme skiers and surfers, raised $427 million in its initial public offering Thursday. GoPro soared $7.15 to $31.17 in its first day of trading on the Nasdaq stock market.

Alcoa plans to acquire Firth Rixson, a British maker of jet-engine parts, for $2.9 billion, as the company continues to shift away from its aluminum-smelting roots. Alcoa's stock rose 31 cents, or 2 percent, to $14.86.

Major European markets mostly fell. France's CAC 40 fell 0.5 percent while Germany's DAX lost 0.6 percent. The FTSE 100 index of leading British companies was flat.

In the market for government bonds, the yield on the 10-year Treasury note dropped to 2.52 percent from 2.56 percent late Wednesday. Bond yields fall when prices rise. The price of crude oil fell 43 cents to $106.07 a barrel.