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February 13, 2014

Bad economic data weighs on Wall Street

Investors have a mega media merger to digest Thursday, but it's not giving the broader market a boost. A bad batch of economic data and lackluster earnings weighed on stocks.

The Dow slid almost 100 points in the early going, or 0.6%. The S&P 500 and Nasdaq were also lower.

Investors were disappointed after a government report showed retail sales unexpectedly fell in January. Economists were looking for no change last month, but sales dropped 0.4%. Excluding auto sales, sales were flat. Higher-than-expected unemployment claims also didn't help.

And corporate earnings weren't particularly good either. Shares of Dow component Cisco fell after the company's weak revenue guidance disappointed investors. The stock was the worst performer in the Dow and the biggest loser in CNNMoney's Tech 30 index. Despite reporting lower revenue and earnings, Cisco raised its dividend.

But cable stocks were moving dramatically after Comcast announced plans to acquire Time Warner Cable in a $45 billion deal that would combine the two biggest cable companies in the United States.

Time Warner Cable shares jumped on the news, while Comcast fell. Shares of Charter Communications, a smaller cable company that had hoped to acquire Time Warner Cable, plunged. Shares of Cablevision Systems, which some feel could be the next cable company to be taken over, were flat after opening sharply higher.

In other company news, PepsiCo announced an increase in quarterly profit and revenue. Shares made slight gains.

Goodyear Tire & Rubber Company reported an increase in operating income for the quarter, compared to a year earlier, but a decline in revenue.

Netflix said it acquired the rights for the animated series "Star Wars: The Clone Wars." The stock was up slightly and is near an all-time high.

Bad weather on the East Coast could lead to light trading volume though. The snowstorm has already forced the Senate to postpone a scheduled appearance by Federal Reserve Chairwoman Janet Yellen. Her testimony in front of the House sent stocks sharply higher Tuesday.

European markets were weaker in afternoon trading, while Asian markets ended with losses, led by the Nikkei, which fell 1.8%.

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