Stocks closed slightly lower yesterday after retailers like Kmart posted poor results and helped reignite investor fears a slowdown in consumer spending will weaken the US economy further. The latest economic data did little to brighten the outlook: First-time jobless claims rose more than expected to 393,000 in the week ended August 18th. At the same time, the number of people who remained on jobless rolls climbed to nearly 3.2 million - the highest in nine years.

"It's that ongoing fear of slowing," said Mr Art Hogan, chief market analyst for Jefferies & Co in Boston. "It puts into words what you don't want to hear. Investors are heading back to the sidelines for a bit.""

The Dow Jones industrial average closed down 47.75 points, or 0.46 per cent, at 10,229.15.

The broader Standard & Poor's 500 Index fell 3.29 points, or 0.28 percent, to 1,162.02. The Nasdaq Composite Index reversed an earlier gain to fall 17.01 points, or 0.91 percent, to 1,843.00.