U.S. stocks fell sharply Thursday amid the worries over inflation and rate hike, as world crude oil prices surged above 73 dollars.

The robust rise of retail sales aggravated the worries of more rate hikes. Retail sales in the United States increased by a solid 0.5 percent in April following a stronger 0.6 gain in the previous month, the Commerce Department reported on Thursday.

The report showed that the biggest advance in U.S. retail sales for April was at gasoline service stations, which saw sales jump by 4.6 percent resulting from the sharp rise in gasoline prices last month.

Consumer spending is closely watched because it accounts for two-thirds of the total U.S. economic activity and retail sales account for about a half of the consumer spending in the country.

The Federal Reserve raised its benchmark short-term rate on Wednesday by a quarter-percentage point to 5 percent. In a brief statement following its policy-making meeting, the Fed said it " judges that some further policy firming may yet be needed to address inflation risks."

World crude oil prices surged above 73 dollars on Thursday amid worries over Nigeria and Iran. New York's main contract, light sweet crude for delivery in June, added 1.19 dollars to close at 73.32 dollars a barrel.

At the closing time, the Dow Jones Industrial Average fell 141. 92, or 1.22 percent, to 11,500.73. The Standard & Poor's 500 index lost 16.93, or 1.28 percent, to 1,305.92, and the Nasdaq composite index sank 48.04, or 2.07 percent, to 2,272.70.

Source: Xinhua