US STOCKS-Wall St drops on oil surge, price data

                                
 (Updates to midday, changes byline)
                                
 * Producer price data fuels inflation worries
                                
 * Record-high oil prices add to negative sentiment
                                
 * Bank shares fall after analyst's gloomy forecast
                                
 By Cal Mankowski
                                
 NEW YORK, May 20 (Reuters) - U.S. stocks fell on Tuesday
after oil leaped above $129 per barrel and producer prices,
excluding food and energy costs, rose more than expected,
adding to concerns about inflation.
                                
 The Dow industrials and Nasdaq were down 1 percent each.
                                
 Discount retailer Target Corp <TGT.N> and home improvement
chain Home Depot Inc <HD.N> both reported declines in quarterly
profit, pointing to weakening consumer spending.
                                
 The retailers' quarterly results and outlooks gave further
evidence that consumers are buckling under falling home values
and soaring gasoline prices.
                                
 The government's Producer Price Index, excluding volatile
food and energy costs, rose 0.4 percent last month. The rise
for the year through April was the largest since 1991.
                                
 "The big question in the market is how consumer spending
holds up in the midst of high energy prices and all of the
problems that we're having,"  said Frank Lesh, futures analyst
and broker at FuturePath Trading LLC in Chicago. "New highs
again for crude oil add to this fear."
                                
 Lesh said it was troubling that year-over-year core PPI was
3 percent, well above the Fed's 2 percent target.
                                
 The Dow Jones industrial average <.DJI> tumbled 172.12
points, or 1.32 percent, to 12,856.04. The Standard & Poor's
500 Index <.SPX> declined 10.33 points, or 0.72 percent, to
1,416.30. The Nasdaq Composite Index <.IXIC> fell 22.57 points,
or 0.90 percent, to 2,493.52.
                                
 Shares of banks, including JPMorgan Chase & Co <JPM.N>,
dropped after an influential analyst warned that the credit
crisis was far from over and could extend beyond next year.
                                
 Meredith Whitney, banking analyst at Oppenheimer & Co, said
the credit crisis will result in three years of multibillion
dollar revenue declines for banks. For details, see
[ID:nBNG86237]
                                
 JPMorgan, the No. 3 U.S. bank, dropped 3.3 percent to
$44.46 on the New York Stock Exchange, while shares of
Citigroup Inc <C.N>, the largest U.S. bank, declined 2.5
percent to $22.41.
                                
 Technology shares also took a heavy beating. Chip maker
Intel Corp <INTC.O> was down more than 3 percent a day after
data-storage memory chip maker SanDisk Corp <SNDK.O> warned
higher oil prices will hurt consumer spending on technology.
                                
 Intel dropped to $24.10, putting the stock among the top
drags. SanDisk shares tumbled 3.5 percent to $28.98.
                                
  Shares of Home Depot, the largest U.S. home improvement
chain, fell 5.4 percent to $27.30 after the retailer posted a
66 percent slide in quarterly profit.
                                
 Target fell 0.8 percent to $54.48 after it said its sales
growth will likely remain sluggish until the U.S. economic
environment improves or stabilizes.
                                
 Among home builders, shares of Toll Brothers <TOL.N> slid
4.7 percent to $23.25. An index of home builder stocks
<.DJUSHB> was down 4 percent, while the S&P retail index <.RLX>
dropped 2 percent. The S&P financial index shed 2 percent.
 (Additional reporting by Ellis Mnyandu; Editing by Kenneth
Barry)