Wall Street dips on World Bank outlook

Cut to world growth forecast sees US stocks retreat from recent rally.

US stocks have closed lower after the World Bank trimmed its 2014 economic forecast and as a top Republican leader faced the loss of his congressional seat after a shock vote.

At the closing bell, the Dow Jones Industrial Average slumped 102.04 points, or 0.60%, to 16,843.88.

The broad-based S&P 500 shed 6.90 points, or 0.35%, to 1,943.89, while the tech-heavy Nasdaq Composite Index gave up 6.06 points, or 0.14%, to 4,331.93.

The World Bank late on Tuesday lowered its 2014 global growth forecast to 2.8% from its January forecast of 3.2%, in part due to bad weather in the US that depressed economic activity and the Ukraine crisis.

The World Bank also predicted flat growth in developing countries.

Meanwhile, House Republican Leader Eric Cantor unexpectedly lost a primary election to Tea Party-backed insurgent David Brat.

The result revived the ultra-conservative Tea Party's prospects, potentially deepening gridlock in Washington.

Briefing.com analyst Patrick O'Hare rated Wednesday's losses in the stock market primarily to profit taking after a rally that produced records for the Dow and S&P 500 over the last week.

O'Hare said the World Bank's lowered forecast was not a surprise and that Cantor's defeat, while unexpected, did not necessarily change things much because "it's not like the stock market was banking on a bipartisan love-fest in Congress anytime soon".

No major economic news was released during the US session, though jobs numbers out of the UK were positive as the unemployment rate hit a five-year low.

All eyes will be on US retail sales and weekly jobless claims tomorrow at the tail-end of a lacklustre week of data and market activity.

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