Stocks fall after surprisingly weak retail sales

NEW YORK (AP) -- Stocks are falling in early trading after the government reported surprisingly weak retail sales numbers.

The Commerce Department on Tuesday said retail sales rose 0.3 percent last month, just half of what economists had predicted. It was the smallest increase since June. Financial analysts said higher prices for gasoline and raw materials hurt consumer spending.

In corporate news, the parent company of the New York Stock Exchange said it has agreed to combine with the operator of the Frankfurt stock exchange, Deutsche Boerse AG. Shares of NYSE Euronext Inc. fell 4 percent in early trading.

At the opening bell, the Dow Jones industrial average is down 46, or 0.4 percent, at 12,222. The Standard & Poor's 500 index is down 5, or 0.4 percent, at 1,328. The Nasdaq composte index is down 10, or 0.3 percent, at 2,808.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) -- Reports on retail sales and the economy will likely sway the stock and bond markets.

The Commerce Department is expected to report Tuesday that retail sales rose for a seventh consecutive month in January, as tax cuts prompted consumers to buy cars and shop after the holidays.

A separate report will likely show that businesses added to their inventories for a 12th consecutive month in December, indicating further gains in production at U.S. factories.

Investors will also get updates on homebuilder sentiment and computer maker Dell releases its results after the market closes.

Ahead of the opening, Dow Jones industrial average futures are down 3, or less than 0.1 percent, at 12,223. Standard & Poor's 500 index futures are down less 1, or 0.1 percent, at 1,327. The Nasdaq 100 index futures are down 2, or 0.1 percent, at 2.380.