The stock market took its worst hit of the summer today as soaring energy prices pushed up the cost of living and cut into retail sales.

The government's consumer price index jumped by 0.5 percent, largely because of the record prices Americans are paying for gasoline.

The impact was painfully clear at Wal-Mart, which today reported the smallest quarterly gain in profits in four years. Sales of the nation's biggest retailer grew 10 percent in the second quarter, but profits increased only 5.8 percent.

Wal-Mart said its customers are cutting back on other purchases because they are spending so much to fill up their gas tanks. By one estimate, the spending power of the average Wal-Mart customer has been cut by more than $200 because of high fuel prices.

Wal-Mart warned that it expects the consumer spending cutbacks to get worse going into the back-to-school season when families with children usually spend heavily on clothes and school supplies.

TJX stores, which runs the T.J.Maxx and Marshall's bargain chains, also reported soft second quarter sales and analysts predicted the weakness will begin working its way up the retail food chain to merchants catering to more affluent customers.

The result was a broad sell-off of retail stocks that took down the whole market.

The Dow Jones industrial average fell 120.93 to 10,513.45--its worst loss since mid-June.

It was the worst loss since April for the Nasdaq Stock Market composite index and the Standard & Poor's 500 stock index. The Nasdaq composite fell 29.98 to 2,137.06. The S&P 500 dropped 14.53 to 1,219.34.

Today's losses left all three indexes at their lowest level in a month. The sell-off was so broad that only four of the 30 stocks in the Dow average and 48 of the S&P 500 stocks were up for the day.

Even retailers like Lowe's, Home Depot, Target and J.C. Penney, which have reported strong growth, saw their stocks fall.

The energy markets offered little relief, with the price of crude slipping just 12 cents a barrel to $66.15.