Investing.com - U.S. stocks fell on Thursday after conflict in Iraq threatened to morph into a full-blown civil war that could roil the Middle East and send global oil prices climbing and hamper recovery.
At the close of U.S. trading, the Dow 30 fell 0.65%, the S&P 500 index fell 0.71%, while the NASDAQ Composite index fell 0.79%.
The Volatility S&P 500 index, which measures the outlook for market volatility, was up 8.36% at 12.57.
Iraqi insurgents tied to al-Qaeda reportedly took full control of the northern oil city of Kirkuk on Thursday and advanced closer to the capital, Baghdad.
On Wednesday, militants from the Islamic State in Iraq and Syria, or ISIS, seized the northern cities of Mosul and Tikrit, which bruised stock prices by fueling fears U.S. recovery could suffer, especially if oil prices rise.
The U.S. said that it is working with Iraq's leaders on a coordinated response to regain lost territory.
Earlier Thursday, U.S. President Barack Obama said Iraq would need assistance from the U.S. to push the insurgents back.
Disappointing U.S. economic indicators dampened spirits on Wall Street as well.
The Commerce Department reported earlier that U.S. retail sales rose 0.3% in May, missing expectations for a 0.6% gain. However, retail sales for April were revised up to a 0.5% gain from a previously reported increase of 0.1%.
Core retail sales, which exclude automobile sales, eased up 0.1% in May, disappointing forecasts for a 0.2% increase. Core sales in April were revised up to 0.4% from a previously reported flat reading.
Separately, the Labor Department reported that the number of individuals filing for initial jobless benefits in the week ending June 7 increased by 4,000 to 317,000, confounding expectations for a decline of 3,000.
Leading Dow Jones Industrial Average performers included Chevron Corporation (NYSE:CVX), up 0.77%, Goldman Sachs Group Inc (NYSE:GS), up 0.35%, and The Travelers Companies Inc (NYSE:TRV), up 0.11%.
The Dow Jones Industrial Average's worst performers included Caterpillar Inc (NYSE:CAT), down 1.87%, Walt Disney Company (NYSE:DIS), down 1.80%, and Home Depot Inc (NYSE:HD), down 1.73%.
European indices, meanwhile, ended the day largely lower.
After the close of European trade, the DJ Euro Stoxx 50 fell 0.21%, France's CAC 40 fell 0.02%, while Germany's DAX fell 0.11%. Meanwhile, in the U.K. the FTSE 100 rose 0.06%.
On Friday, the U.S. is to round up the week with data on producer price inflation and preliminary data on consumer sentiment from the University of Michigan.