NEW YORK — Wall Street has closed sharply lower as worries about losses in the financial sector, higher unemployment and lackluster sales at retailers touched off fresh concerns about the economy.

The market's pullback erased most of the 370-point gain the Dow Jones industrial average logged the two prior sessions and shows the lack of conviction behind many of the investors' recent bets.

Heading investors' list of worries, insurer American International Group Inc. reported a loss of more than $5 billion for the second quarter and the Labor Department says the number of newly laid off people seeking jobless benefits jumped to its highest level in more than six years. Weak sales reports from retailers added to investors' unease.

The Dow is down 224 points at the 11,431 level.