AP, NEW YORK  -- Stocks fell sharply for a second session Wednesday after the government reported retail sales fell in July to their weakest levels in five months and as oil prices advanced. The Dow Jones industrial average fell about 150 points.

The retail figures fell short of expectations and fed investors' anxiety about the health of the industry and consumers, whose spending is the key driver of the economy.

The Commerce Department said retail sales slipped 0.1 percent last month as rising prices helped offset the effect of economic stimulus payments to U.S. households. Excluding a big drop in sales of automobiles, retail sales rose 0.4 percent. But even on that basis it was the weakest showing in five months.

Wall Street had expected sales to remain flat after a minor increase in June. The report followed a warning from department store bellwether Macy's Inc. that its full-year profits would fall short of expectations because of slower sales.

Investors appeared unfazed by another Commerce Department report that businesses added to their inventories in June at the fastest pace since January, a bigger gain than had been expected. Stockpiles on businesses' shelves and backlots grew by 0.7 percent in June, nearly double the 0.4 percent rise in May.

An advance in oil prices also tinged investor sentiment. Light, sweet crude rose $2.31 to $115.32 a barrel on the New York Mercantile Exchange after a weekly government data showed domestic inventories fell.

In midmorning trading, the Dow fell 149.16, or 1.28 percent, to 11,493.31 after losing just under 140 points on Tuesday.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 11.02, or 0.85 percent, to 1,278.57. The technology-heavy Nasdaq composite index fell 10.34, or 0.43 percent, to 2,420.27. The comparatively modest decline came after Applied Materials Inc. rose 92 cents, or 4.9 percent, to $19.39 in response to its earnings report late Tuesday.

On Tuesday, stocks fell sharply on news from JPMorgan Chase & Co. and other financial companies that reminded investors that the credit crisis is still hurting the economy.

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