NEW YORK (Reuters) - Global stocks fell and the dollar edged lower on Wednesday as U.S. retail sales fell for a second straight month in May and wholesale prices dropped by the most in three years, further signs the U.S. economy is struggling.
Concerns that Spain's financing problems may spread to Italy, whether Greece will remain in the euro zone after its June 17 election and the potential impact of Europe's woes may have on global economic growth also weighed on stocks.
European shares extended losses and stocks on Wall Street opened lower as demand for building materials sagged and falling gasoline prices crimped receipts at service stations, dragging retail sales down 0.2 percent, the Commerce Department said.
April retail sales were revised to show a 0.2 percent drop instead of the previously reported 0.1 percent gain. Excluding the surge of auto sales, sales fell 0.4 percent, the biggest decline in two years.
The U.S. Labor Department said its producer price index dropped 1.0 percent in May as energy costs slumped 4.3 percent.
"Headline retail sales was in line with expectations, however, excluding autos the number looks softer than forecast," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
The dollar fell against the yen and briefly extended losses against the euro before the single currency rebounded.
The Dow Jones industrial average <.dji> was down 36.10 points, or 0.29 percent, at 12,537.70. The Standard & Poor's 500 Index <.spx> was down 6.32 points, or 0.48 percent, at 1,317.86. The Nasdaq Composite Index <.ixic> was down 13.52 points, or 0.48 percent, at 2,829.55.
In Europe, the FTSEurofirst 300 index <.fteu3> of top regional companies was down 0.7 percent to 983.05 points.
MSCI's all-country world equity index <.miwd00000pus> fell 0.3 percent to 300.57 points.
The U.S. dollar index <.dxy> fell 0.2 percent at 82.270, while the euro was up 0.24 percent at $1.2535.
Against the Japanese yen, the dollar was down 0.19 percent at 79.37.
U.S. Treasuries prices erased losses and turned higher.
The benchmark 10-year U.S. Treasury note rose 6/32 in price to yield 1.64 percent.
Yields on 10-year German bonds fell to 1.46 percent.
"Many now believe that the point of no return is getting nearer with the peripheral (European) economies in a somewhat irreversible dynamic, with their economies depressed and their access to capital markets shrinking," said Lee McDarby at Investec Corporate Treasury.
U.S. crude futures extended losses to more than $1 a barrel in the wake of weak retail sales data.
U.S. July crude was down $1.00 at $82.32 a barrel.
(Additional reporting by Richard Hubbard; Reporting by Herbert Lash; Editing by Padraic Cassidy)