US STOCKS-Wall St drops after another Japan earthquake

* Japan ETF, Nikkei futures fall on quake news

* Costco, Macy’s sales strong, shares rise; Gap falls

* Jobless claims fall slightly more than expected

* Indexes down: Dow 0.4 pct, S&P 0.2 pct, Nasdaq 0.2 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midday, adds Japan earthquake, changes byline)

By Ryan Vlastelica

NEW YORK, April 7 (Reuters) – U.S. stocks fell on Thursday
shortly after an earthquake with a magnitude of 7.4 hit Japan
and a tsunami warning was issued.

For details, see [ID:nDYE7EA00Y]

The iShares MSCI Japan Index ETF (EWJ.P: Quote, Profile, Research) dropped 0.6
percent in midday trading while Nikkei futures (NKc1: Quote, Profile, Research) slid 1.1
percent. U.S.-listed shares of Toyota Motor Corp (TM.N: Quote, Profile, Research) fell
0.4 percent.

The news “seems to be generating a bit of jitteriness and
has caused people to take a bit of profit,” said Nick Kalivas,
senior equity index analyst at MF Global in Chicago. “In a
couple hours from now, if it looks like damage is minimal, the
market will go back to trading economics as opposed to
earthquakes.”

On March 11 the country was hit by a massive quake that
created a tsunami. Officials have said after those disasters
12,554 were confirmed dead, with another 15,000 missing. The
events also sparked a crisis with some nuclear plants that
still hasn’t been resolved.

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was down 46.55
points, or 0.37 percent, at 12,380.20. The Standard & Poor’s
500 Index (.SPX: Quote, Profile, Research) was down 2.77 points, or 0.21 percent, at
1,332.77. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 4.49
points, or 0.16 percent, at 2,795.33.

Stocks had been mostly flat prior to the news of the quake,
with technical resistance on the S&P 500 preventing further
gains after a larger-than-expected drop in weekly jobless
claims and March retail sales that were better than expected.
[ID:nN0784911]

Among retailers, Costco Wholesale Corp (COST.O: Quote, Profile, Research) beat
expectations and its shares gained 3.4 percent to $77.55.
Macy’s Inc (M.N: Quote, Profile, Research) rose 1.9 percent to $25.6 while Gap Inc
(GPS.N: Quote, Profile, Research) fell 1.9 percent to $22.63.
(Additional reporting by Leah Schnurr; Editing by Kenneth
Barry)

US STOCKS-Wall St drops after another Japan earthquake