New York  - US markets fell Wednesday after retailers posted weaker sales as consumers hit by a weaker US economy stayed home.

The US Commerce Department said retail sales fell 0.1 per cent in July after gaining 0.3 per cent in the previous month. The news drove down retail stocks.

"Your house isn't worth as much as it used to be, the unemployment rate is going up and you're paying more for gas than you've ever paid before," David Heupel of Thrivent Financial for Lutherans told Bloomberg financial news. "A lot of crosscurrents are hitting the consumer right now and particularly the discretionary money they have to spend."

The blue-chip Dow Jones Industrial Average dropped 109.51 points, or 0.9 per cent, to 11,532.96. The broader Standard & Poor's 500 Index lost 3.76 points, or 0.3 per cent, to 1,285.83. The technology- heavy Nasdaq Composite Index slid 1.99 points, or 0.1 per cent, to 2,428.62.

The US currency slipped to 66.99 euro cents from 67.01 euro cents on Tuesday, and rose to 109.34 Japanese yen from 109.23 yen.

Gold futures closed at 831.50 dollars per fine ounce, down 16.90 dollars. (dpa)