Stocks closed lower, hurt by rising oil prices and fresh worries about the financial sector, though the market ended off its lows for the day.
A profit shortfall by manufacturer Deere added to worries about the health of the U.S. economy. Investors also were troubled by the government's retail sales report and a jump in oil prices.
Oil closed at $115.85 a barrel, up $2.84 from Tuesday's close but below the level of $116.50 or so that traders were watching as key to crude's direction.
Shares of Deere plunged after the farm equipment maker said quarterly profit rose 7 percent but fourth quarter results would be hurt by raw materials costs.
Theresults also reflected the widening impact of the U.S. housing slump and and dragged along other big manufacturers, including Caterpillar.
Shares of financial services companies, including banks, also took a beating on fears of more mortgage-related losses.
"People are worried about the impact the credit crunch is going to have on consumers," said Eric Kuby, chief investment officer at NorthStar Investment Management Corp in Chicago. "The retail sales number this morning was another data point suggesting that the economy is weakening and the consumer is pulling back on their purchases."
Retail sales edged down 0.1 percent in Julyon another big drop in auto sales,capping a 21.6 percent decline over the past 12 months that was the largest in the past 26 years, a Labor Department report showed.
The Nasdaq briefly flirted with positive numbers as Apple continued its iPhone sales-fueled rally. Best Buy, meanwhile, was one of the positives for retail as shares got a boost on news that the store will be the first general retailer to sell the phones.
Retailers Beat Down
But automakers were getting crushed by crude oil's comeback, with shares at General Motors and Ford both down sharply.
Earnings news weighed on markets and amplified concerns over the economy as retailers Liz Claiborne and Macy's both posted reports that left Wall Street dissatisfied.