Stocks fell on Wednesday, dragged down by consumer, technology and industrial issues, after oil surged to a 7-month high, triggering worries it may curtail spending.

Gains in the price of oil and other commodities helped to underpin stocks globally on hopes economic activity was picking up. But in the United States, investors worried that higher prices may fuel inflation and hamper a recovery.

The crude rise is certainly having some impact on sentiment in retail stocks. There is a little bit of skepticism that consumers are going to continue to spend unabated, even with any short-term economic improvement, said Michael James, senior trader at Wedbush Morgan in Los Angeles.

The Dow Jones industrial average <.DJI> shed 20.33 points, or 0.23 percent, to 8,742.73. The Standard & Poor's 500 Index <.SPX> lost 3.63 points, or 0.39 percent, to 938.80. The Nasdaq Composite Index <.IXIC> dropped 17.83 points, or 0.96 percent, to 1,842.30.

IPod maker Apple Inc fell 2.7 percent to $138.92 and was the top drag on the Nasdaq, while discount retailer Wal-Mart Stores Inc shed 0.8 percent to $50.23. The S&P retail index <.RLX> slipped 0.9 percent.

The drop in the Nasdaq reversed gains on Tuesday, when an upbeat outlook from Texas Instruments Inc sent semiconductor shares higher.

Results from a key debt auction from the U.S. government are expected at 1 p.m. EDT, and investors are looking for possible hikes in borrowing costs that could also hurt a recovery.

I think we're going to need to see some more significant positive economic data points before people become convinced that the market's going to make a move to higher levels, Wedbush's James said.

One sign today is going to be how well the 10-year auction goes. There'll be a lot of people watching that, and it's going to have an impact on how the market trades later today.

Construction equipment manufacturer Caterpillar Inc fell 1.4 percent to $37.70 and was among the top drags on the Dow industrials.

Rising shares included energy companies Chevron Corp , up 0.5 percent to $70.56, and Exxon Mobil Corp , up 0.6 percent to $73.53, as U.S. light crude futures advanced 1.8 percent to $71.26 per barrel. The S&P energy sector <.GSPE> gained 0.4 percent.

Home Depot Inc was up 1.5 percent to $24.71, which also limited losses in the blue-chip Dow index. The home improvement retailer said the worst of the housing slump was over and that earnings could be flat this year, rather than falling, as it previously forecast.

(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)