* Worse-than-expected retail sales spur economic worry

* Financials slide after Goldman's $5 bln stock issue

* Dow off 1.7 pct; S&P 500 off 2 pct; Nasdaq off 1.7 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates with Intel shares dropping after hours, eBay planning Skype IPO; adds volume in last two paragraphs)

By Ellis Mnyandu

NEW YORK, April 14 (Reuters) - U.S. stocks fell on Tuesday as a surprising drop in retail sales dented hopes the recession was abating and financial shares slid on fears that Goldman Sachs' (GS.N: Quote, Profile, Research) share offering could prompt others to follow suit.

Retail sales in March snapped two months of increases and sparked selling across the board, with the stocks of retailers, big manufacturers, technology and energy companies among the casualties. The S&P retail index fell 2.5 percent.

But the financial sector, which had recently led the stock market's 5-week rebound from 12-year lows, took the biggest beating by far, with the KBW Bank index falling 8.1 percent and the S&P financial index dropping 7.7 percent.

"There is fear that other banks wanting to pay back government funds may want to raise cash by issuing shares," said Ryan Detrick, senior technical strategist at Ohio-based Schaeffer's Investment Research.