U.S. stocks fell on Thursday after Japan suffered a major aftershock, which caused injuries and renewed concerns about industrial supply disruptions and nuclear power.

Investors sought protection against further market declines, which sent the CBOE Volatility Index VIX <.VIX> up 2.2 percent to 17.27. VIX futures also rose as investors bet the index could rise above 20 by May.

The earthquake, measured at magnitude 7.4, caused no tsunami or detectable damage at the Fukushima Daiichi nuclear plant, but investors remained cautious after Japan's 9.0 deadly earthquake and tsunami on March 11. For details, see

It got people thinking that maybe this is not finished yet, and this is of a bigger scale than what we had expected, said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

The VIX, which often moves inversely to the S&P 500, measures the cost of hedges or protection investors are willing to pay against a fall in the S&P 500. The heavy call volume suggests expectations for more anxiety in the future.

The iShares MSCI Japan Index ETF dropped 0.9 percent, rebounding off earlier lows, while dollar-denominated Nikkei futures slid 1.2 percent.

The Dow Jones industrial average <.DJI> was down 61.91 points, or 0.50 percent, at 12,364.84. The Standard & Poor's 500 Index <.SPX> was down 5.35 points, or 0.40 percent, at 1,330.19. The Nasdaq Composite Index <.IXIC> was down 5.97 points, or 0.21 percent, at 2,793.85.

Stocks had been mostly flat prior to the news of the quake, with the S&P 500 encountering strong technical resistance that stymied gains after a larger-than-expected drop in weekly jobless claims and March retail sales that topped expectations.

The consumer seems to be hanging in there despite higher gas prices, said Donald Selkin, chief market strategist at National Securities in New York, which has about $3 billion in assets under management.

Among retailers, Costco Wholesale Corp beat expectations, and its shares gained 3.4 percent to $77.57. Macy's Inc rose 0.3 percent to $25.26 while Target Corp fell 2 percent to $49.93.

Bed Bath and Beyond Inc surged 10.1 percent to $54.37 a day after it forecast full-year earnings growth that would beat Wall St expectations.

U.S.-listed shares of Japanese stocks fell, but some analysts said they might buy on the weakens.

I'm looking at auto manufacturers, and I'm definitely looking to buy Honda if it gets cheap enough, said Tim Hartzell, chief investment officer for Houston-based Sequent Asset Management.

New York-traded shares of Honda Motor Corp rose 0.2 percent on volume that neared its 50-day average.

(Reporting by Angela Moon, Editing by Kenneth Barry)

Fall Japan