Investors sent stocks sharply lower Thursday as oil prices continued their climb higher and new questions about the safety of arthritis drugs pressured pharmaceutical stocks.

Uninspiring September retail sales contributed to the market's malaise.

The Dow Jones industrial average fell 114.52, or 1.1 percent, to 10,125.40. The Standard & Poor's 500-stock index declined 11.40, or 1 percent, to 1130.65. The Nasdaq composite index dropped 22.51, or 1.1 percent, to 1948.52.

Investors were newly uneasy about drug stocks after a new scientific study showed that Pfizer's Celebrex could cause cardiovascular problems similar to those caused by Merck's Vioxx, which was pulled from the market last week after Merck found a heightened risk of heart attack and stroke. Pfizer slumped $1.19, to $29.99, while Merck dropped 69 cents, to $30.98.

Other drugmakers also fell. Eli Lilly slid $1.91, to $59.56; AstraZeneca declined 84 cents, to $38.80; and GlaxoSmithKline dropped $1.15, to $41.90.

Results at most major retailers were mixed, with the biggest gains coming from apparel chain American Eagle Outfitters, which reported a 22.7 percent rise in same-store sales -- sales at stores open at least a year. Talbots, also a clothing retailer, saw a 1.3 percent drop in same-store sales, which was better than the 4.0 percent drop Wall Street expected. American Eagle gained 20 cents, to $37.62; Talbots also rose 20 cents, to $25.99.

Costco Wholesale climbed $1.72, to $44.65, after the company reported a 24 percent hike in earnings for the third quarter.

The Labor Department reported a steep drop in first-time unemployment claims. The number of new jobless claims dropped last week by 37,000 to 335,000, the lowest level since the beginning of September. Wall Street had been expecting 355,000 claims for the week. The big test for employment, however, will come Friday, when the Labor Department issues its monthly jobs creation report.

Other Indicators

* The New York Stock Exchange composite index fell 63.21, to 6654.22; the American Stock Exchange index fell 11.29, to 1278.50; and the Russell 2000 index of smaller-company stocks fell 10.06, to 582.60.

* Declining issues outnumbered advancing ones by 8 to 3 on the NYSE, where trading volume rose to 1.45 billion shares, from 1.42 billion on Wednesday. On the Nasdaq Stock Market, decliners outnumbered advancers by 69 to 1 and volume totaled 1.72 billion, down from 1.91 billion.

* The price of the Treasury's 10-year note fell $2.19 per $1,000 invested, and its yield rose to 4.25 percent, from 4.22 percent on Wednesday.

* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 111.19 yen, down from 111.41 late Wednesday, and a euro bought $1.2296, up from $1.2267.

* Light, sweet crude oil for November delivery settled at $52.67, up 65 cents, on the New York Mercantile Exchange.

* Gold for current delivery fell to $418.00 a troy ounce, from $418.40 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.