More disappointing U.S. economic figures weighed on markets Friday after a solid run that's seen the two main U.S. stock indexes strike a series of all-time closing highs.
The Commerce Department reported that retail sales in the U.S. fell 0.4 percent in March from the month before, below expectations for a flat reading. The figures reinforced the sense that the U.S. economy, the world's largest, may be losing some traction following an increase in payroll taxes. They also chime with last week's worse than expected nonfarm payrolls figures for March.
"Recent data suggests that the economy took a step backward in March after coming out of the gates reasonably strongly to start the year," said Jim Baird, chief investment officer for Plante Moran Financial Advisors.
In Europe, the FTSE 100 index of leading British shares closed 0.5 percent lower at 6,384.39 while Germany's DAX fell 1.6 percent to 7,744.77. The CAC-40 in France dropped 1.2 percent to 3,729.30.
In the U.S., the Dow Jones industrial average was down 0.3 percent at 14,819.19 while the broader S&P 500 index fell 0.6 percent 1,583.70. Mixed earnings from JP Morgan Chase and Wells Fargo Bank failed to encourage traders to buy.
Even before the retail sales figures, markets had been on the retreat following a week that's seen both the Dow Jones index and the S&P 500 record a run of record highs.
Wall Street's gains have also helped many of Europe's indexes approach multi-year highs, even though many countries there are in recession and the region's debt crisis flares up at regular intervals. Meanwhile, Japan's Nikkei has been riding high following an aggressive new approach from the country's central bank.
The subdued tone was evident in other financial markets, too, with supposedly riskier assets under some pressure. The euro, for example, was trading 0.1 percent lower at $1.3095 even though industrial production across the 17 European Union countries that use the currency rose by a monthly rate of 0.4 percent in February, double market expectations.
Meanwhile, in Dublin, Ireland, European finance ministers approved a seven-year extension to the rescue loans for Ireland and Portugal. That is expected to ease the pressure on the two bailed-out countries to return to bond markets to finance themselves.
Earlier in Asia, Japan's Nikkei 225 index retreated 0.5 percent to close at 13,485.14, a slip from the day before when the Tokyo benchmark closed above 13,500 for the first time since August 2008. The Nikkei has surged on the back of the Bank of Japan's aggressive new approach to jolting the world's third-largest economy out of a prolonged slump.
The dollar, which has been surging against the yen following the Bank of Japan's new policy prescription, gave up some recent gains, trading 0.8 percent lower at 98.90 yen. The yen's fall has been a key reason behind the Nikkei's advance as it potentially makes the country's exports cheaper in international markets.
Elsewhere, South Korea's Kospi tumbled 1.3 percent to 1,924.23, as jitters persisted over tensions on the Korean Peninsula. India's Sensex fell 1.5 percent to 18,269.16 while mainland Chinese shares were nearly unchanged. Hong Kong's Hang Seng fell 0.1 percent to 22,089.05.
The price of oil was weaker, with the benchmark New York rate down $2.38 at $91.13 a barrel.