Published: August 20, 2008 07:40 am         

Stocks fall on inflation data, financial worries

NEW YORK — Wall Street fell sharply for a second straight session Tuesday after a hefty jump in wholesale inflation and a drop in new home construction gave investors more reason to believe an economic recovery is far off. The Dow Jones industrial average dropped 130 points to 11,348.55, after losing 180 points on Monday.

A rebound in oil prices added to investors’ anxiety. Oil’s retreat over the past month had given the stock market a brief rally. But aside from August’s commodities drop, there have been few bright spots on Wall Street this summer; the banks are forecasting more losses, the credit markets are still tight, the housing market remains in a slump and the economy continues to lose jobs — all of which gives investors little reason to buy stocks.