By Caitlin Ostroff 

Stocks slipped Thursday, while Chinese stocks dropped by the most in over five months, amid fresh concerns about rising coronavirus infections and the global economy's faltering recovery from the pandemic.

The S&P 500 fell 0.7% in the early minutes of U.S. trading, while the Dow Jones Industrial Average lost 162 points, or 0.6%, and the Nasdaq Composite Index retreated 1%.

Overseas, the Shanghai Composite Index retreated 4.5% by the close of trading in its steepest drop since February. Data on Thursday showed pockets of weakness, especially in China's retail sector, even as the world's second-largest economy returned to growth. Meanwhile, the pan-continental Stoxx Europe 600 declined 0.5%.

U.S. retail sales for June rose 7.5%, more than economists expected, but investors are growing increasingly concerned that further recovery could be stymied by a recent surge in infections across the country. Some states are closing restaurants, bars and stores to slow its spread, and that's likely to dampen consumer spending, a crucial driver of the U.S. economy.

"The key issue now is concern about a new wave of infections and the potential impact on the economic recovery," said Andrew Hunter, senior U.S. economist at Capital Economics. Even if the retail sales data is strong, "it's sort of old news and the bigger concern is how big of a potential slowdown are we looking to in July," he said.

Fresh figures on jobless claims showed that 1.3 million Americans filed for unemployment in the week ending July 11. The weekly tally of new unemployment claims by laid-off workers has slowly trended downward in recent weeks, but remain at historically high levels.

In premarket trading, shares of Norwegian Cruise Line tumbled 9.5% after it said it is looking to raise $925 million in debt and $250 million in an underwritten public offering of shares as its sailings have been canceled due to the coronavirus pandemic, drying up revenue.

Shares of Bank of America fell 2.9% after it reported that profit tumbled 52% in the second quarter after the bank set aside billions of dollars to prepare for soured loans.

At rival Goldman Sachs Group, traders and investment bankers posted near-record revenue on Wednesday to keep firmwide profits steady, throwing an elbow to larger commercial-bank rivals that have blamed the pandemic for poor quarterly results.

Twitter's shares fell 4.2% in offhours trading after the social media company was hit with a widespread attack Wednesday that allowed hackers to take over an array of accounts including those of celebrities, politicians and billionaires. Shares of Dell Technologies rose 10.4% in offhours trading after the company said Wednesday it is considering a potential spinoff of its 81% equity ownership interest in VMWare Inc.

In bond markets, the yield on the 10-year Treasury fell to 0.609%, from 0.629% Wednesday.

Across Asia, most major equity benchmarks ended the day down. Hong Kong's Hang Seng Index retreated 2%, while Japan's Nikkei 225 lost about 0.8%.

Data on China's retail sector showed it is recovering more slowly than expected, with sales falling 1.8% in June from a year earlier. Economists had projected a 0.3% growth.

Investors also said that moves in stock indexes world-wide are likely outsized due to lower trading volumes.

"We're entering a period in the summer where liquidity tends to diminish, " said Yuko Takano, a portfolio manager at Newton Investment Management. Ms. Takano said she is focusing on corporate earnings over the next few weeks to assess how corporations have fared, and expects economic data to remain choppy.

--Chong Koh Ping contributed to this article.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

July 16, 2020 09:46 ET (13:46 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.