NEW YORK, March 17: The major US share indexes ended lower on Friday after a stronger-than-expected snapshot on inflation renewed economic concerns days before the US Federal Reserve meets to mull US interest rates.
The Dow Jones Industrial Average closed down 49.27 points (0.41 per cent) at at 12,110.41 while the Nasdaq composite shed a lesser 6.04 points (0.25 per cent) to 2,372.66.
The broad-market Standard & Poor's 500 lost 5.33 points (0.38 per cent) to end at 1,386.95.
Lingering concerns about the health of the country's vast mortgage market, especially loans made to people with poor credit histories, also continued to overshadow the market, traders said.
Analysts said the latest inflation reading would likely cement a decision next week by the Fed to keep US interest rates on hold at 5.25 per cent. The Fed, which has cited inflation as one of its key worries, meets Tuesday and Wednesday to mull US rates.The Labour Department said Friday that US consumer prices rose 0.4 per cent in February, stronger than the 0.3 per cent rise widely expected by Wall Street.
The core inflation reading, which strips out volatile food and energy costs, rose 0.2 per cent and was in line with forecasts.
Prices moderated for vehicles and personal electronics, but most other categories showed gains, Wachovia economists said in a note to investors.
The Fed is not out of the woods with respect to inflation, so despite slowing growth, expect another hold from policymakers next week, the economists added.
Investors will probably hold back both buying and selling until the Fed delivers its policy statement next Wednesday afternoon, said Frederic Dickson, an analyst at D.A. Davidson & Co.
Few expect the Fed to change their current interest rate policy, Dickson said.
Separately, a Fed survey showed US industrial production rebounded by a much stronger-than-expected 1.0 per cent in February after falling in the prior month.
Most economists had been expecting the central bank's monthly snapshot of the nation's industrial sector, measuring the output of US factories, mines and utilities, to show a rise of just 0.3 per cent.The jump in industrial output across the United States, the strongest gain since November 2005, was largely attributed to a cranking up of gas and electricity output from the nation's utilities amid cold winter temperatures.
On the stock front, mortgage groups remained under the microscope amid ongoing concerns about loans to so-called “subprime” borrowers, or people who have troubled credit histories.
Countrywide's stock closed down 51 cents at $34.96 while Accredited Home Lenders Holding Co., ended up a strong $1.47 at $10.90 after announcing it had reached a deal to see $ll 2.7 billion of its loan portfolio.
Discount air carrier JetBlue's stock ended down 21 cents at $11.69 after announcing possible flight delays across the country amid harsh weather forecasts predicting snow flurries in some regions.Bond prices fell as the yield on the 10-year US Treasury bond increased to 4.545pc from 4.534 per cent Thursday and that on the 30-year bond rose slightly to 4.695pc from 4.692 per cent.
Bond prices and yields move in opposing directions. ---AFP