Due to a worse than expected report on retail sales, U.S. stocks opened lower, on Wednesday, as investors wrestled with new doubts about the health of our economy.  The Dow Jones Industrial Average was down early and the Nasdaq Composite was down 1.6%. With the exception of health care, all major industries were down. 

The Commerce Department reported that retail sales fell 0.4% in April from the prior month, a steeper decline than the 0.1% slip economists expected. Sales in March were revised down. Consumer spending makes up more than two-thirds of U.S. gross domestic product, the broad measure of economic activity. GDP shrank at a 6.1% rate during the first quarter and would have contracted farther if not for a minor spurt in consumer spending. If Americans continue to curb their purchases of goods and services in the months ahead, that would undermine the scenario of a second-half economic rebound that investors have been hoping to see.

The week’s consumer spending report also struck at a time when many market veterans believe stocks are vulnerable to a correction following a bustling springtime rally. Investors are carefully sorting through individual names, looking for those best positioned to weather the remainder of the recession. 

Other data suggested little relief in the housing sector – a key driver of the recession that has dragged on since December 2007. A report by RealtyTrac showed that the number of U.S. households facing foreclosure jumped 32% in April, and mortgage applications fell last week as fewer homeowners sought to refinance. 

One new source of pressure facing consumers is a resurgence in energy prices. Crude-oil futures have climbed back to around $60 a barrel after falling close to $30 a barrel earlier this year. Data Wednesday showed import prices jumped by 1.6% last month thanks to the jump in fuel prices. Oil futures remained high in early trading, hovering above $58 a barrel ahead of a weekly stockpiles report. 

Asian markets ended mostly higher, with the Nikkei up 0.5% boosted by a better-than-expected earnings outlook from Nissan Motor. Stocks in Europe were lower.