Stocks edged lower on Friday after a massive earthquake hit Japan and a disappointing reading on consumer sentiment.

The biggest earthquake on record to strike Japan triggered a roughly 30-foot tsunami, killing hundreds of people and sweeping away everything in its path, including houses, ships and cars.

U.S. consumer sentiment fell to its lowest level in five months in early March as gas prices rose, a survey released on Friday showed.

The data ran counter to a report from the Commerce Department showing retail sales rose 1.0 percent, the largest gain since October and in line with expectations.

The market held together well because of the retail sales numbers, said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.

But those are not good numbers when you think about the future of retail sales. This is going to take some of the upward momentum out of the market.

The Dow Jones industrial average <.DJI> dropped 42.50 points, or 0.35 percent, to 11,942.11. The Standard & Poor's 500 Index <.SPX> lost 2.64 points, or 0.20 percent, to 1,292.47. The Nasdaq Composite Index <.IXIC> fell 9.46 points, or 0.35 percent, to 2,691.56.

Among insurers likely to have exposure in Japan, Aflac Inc fell 1.5 percent to $54.87 and Berkshire Hathaway Inc lost 0.8 percent to $84.26. The KBW Insurance index <.KIX> fell 0.8 percent.

Oil prices fell, with Brent crude futures down 1.2 percent to $114, and U.S. crude off 2.2 percent at about $100.

Japanese stock futures were down 3 percent, but market players said the slide may not be too deep because major cities and manufacturing facilities were not affected.

Chinese inflation topped expectations in February and looked set to climb further in coming months, adding to pressure for another dose of monetary tightening.

Investors also watched the Middle East and North Africa as police flooded the streets of Saudi Arabia's capital looking to deter a planned day of demonstrations, with small protests reported in the East.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

Japan Quake