* Business inventories up less than expected
* August retail sales flat as confidence crumbles
* Indexes: Dow down 0.5 pct, S&P down 0.4 pct, Nasdaq flat
* For up-to-the-minute market news see [STXNEWS/US] (Updates to midmorning)
By Angela Moon
NEW YORK, Sept 14 (Reuters) - U.S. stocks fell on Wednesday as optimism faded over comments about possible new euro zone bonds to help ease the region's debt crisis, and lackluster data on U.S. retail sales gave investors pause.
Stocks dropped further after an Austrian parliamentary panel failed to pass changes to a euro zone bailout fund, possibly delaying government approval until October. Officials said approval was only delayed, not endangered. For details, see [ID:nL5E7KE34A]
In the latest U.S. economic data, growth in retail sales stalled in August after political battling undermined faith that Washington could steer the country clear of a double-dip recession. [ID:nS1E78D0B7]
Also, U.S. business inventories rose slightly less than expected in July, suggesting caution by firms about demand at the start of the third quarter. [ID:nCAT005512]
"Huge market turmoil had an obvious impact on retail sales at the same time job hires remain lackluster," said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.
The Dow Jones industrial average <.DJI> was down 59.11 points, or 0.53 percent, at 11,046.74. The Standard & Poor's 500 Index <.SPX> dipped 4.66 points, or 0.40 percent, at 1,168.21. The Nasdaq Composite Index <.IXIC> was off 1.18 points, or 0.05 percent, at 2,530.97.
Big-cap technology companies supported the Nasdaq, which outperformed other indexes.
Dell Inc's
Cisco Inc