Wal-Mart lifts retail shares as US stocks retreat

Wal-Mart and some smaller retailers surged Thursday following strong quarterly results, while the broader US market retreated on worries about higher interest rates.

Wal-Mart Stores jumped 9.3 percent after reporting better-than-expected first-quarter earnings. Sports apparel and equipment chain Dick's Sporting Goods and youth-oriented apparel chain Urban Outfitters soared 8.7 percent and 14.1 percent following earnings.

The results boosted more broadly the beaten-down retailer sector, including Best Buy, Macy's and Nordstrom, all of which climbed more than two percent.

But it was not enough to buoy the whole market. At the closing bell, the Dow Jones Industrial Average stood at 17,434.27, down 0.5 percent.

The broad-based S&P 500 dropped 0.4 percent to 2,039.95, while the tech-rich Nasdaq Composite Index fell 0.6 percent to 4,712.53.

Investors fixated on hawkish Fed statements, including remarks Thursday from New York Federal Reserve Bank President Bob Dudley that a June or July rate hike was "reasonable" if economic data stays solid.

"We just have a constant drumbeat from Fed officials," warning of a rate increase soon, said Alan Skrainka chief investment officer at Cornerstone Wealth Management.