US STOCKS-Inflation concerns, oil push market sharply lower

(Updates to early afternoon, changes byline)

* Producer price data fuels inflation worries

* Record-high oil prices add to negative sentiment

* Bank shares fall after analyst's gloomy forecast

By Kristina Cooke

NEW YORK, May 20 (Reuters) - U.S. stocks slid on Tuesday after oil prices jumped above $129 a barrel and a key inflation gauge rose more than expected, adding to mounting concerns about U.S. consumers' discretionary spending power.

Weak quarterly results and outlooks from discount retailer Target Corp (TGT.N: Quote, Profile, Research, Stock Buzz) and home improvement chain Home Depot Inc (HD.N: Quote, Profile, Research, Stock Buzz) further underscored how consumers are struggling as gasoline prices soar and the value of their homes drops.

Bank shares were the biggest drags on the S&P 500 and the Dow, after an influential analyst warned that the credit crisis was far from over.

The tone was set early in the session, after the U.S. producer price index, excluding volatile food and energy costs, rose 0.4 percent last month. The rise for the year through April was the largest since 1991.