NEW YORK -- Stocks pulled back modestly today in tentative trading as signs of persistent inflationary pressures added some uncertainty to the interest rate outlook before next week's key Federal Reserve meeting. Inflation fear
hits Dow by 35.73The Dow Jones industrial average fell 35.73 to close at 7,654.25. The blue-chip barometer, which has been seesawing through the week, slid from a 40-point morning gain to a 96-point loss before recovering over the final hour.
Decliners outnumbered advancers by a 10-to-9 margin on the New York Stock Exchange, with 1,331 up, 1,469 down and 606 unchanged. NYSE volume was 499.78 million shares vs. 603.03 million yesterday.
The Standard & Poor's 500-stock list fell 5.30 to 883.69, and the NYSE composite index fell 1.97 to 460.93. The Nasdaq composite index fell 9.87 to 1,436.37, and the American Stock Exchange composite index fell 3.14 to 616.10.
On the bond market, interest rates rose again amid the mounting jitters before next week's Fed meeting and the monthly report on payroll and wage levels, a leading force behind inflation.
In an unsettling prelude to the monthly employment data, the Labor Department reported that the number of first-time claims for jobless benefits fell more than expected last week.
Stocks fell sharply in early spring amid fears a strong job market would boost wages and cause inflation. In mid-April, however, the market began rallying back amid signs that the economy is easing enough to keep inflation low without a boost in interest rates by the Fed.