Jump in inflation sends stocks falling

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NEW YORK -- Wall Street retreated Tuesday from attempts to push the Dow Jones industrial average to 12,000, rattled by a fresh batch of inflation data and a downgrade of chip maker Intel Corp. The Dow was less than three points away on Monday from reaching the psychologically important milestone for the first time. Behind the three-week run up in stocks was optimism that corporate profits will remain robust amid a slowing economy. However, that confidence was dealt a setback on Tuesday after the U.S. Labor Department reported a bigger-than-expected jump in core wholesale inflation, which unearthed the market's fears of higher interest rates. Also exasperating investors was a downgrade of Dow component Intel ahead of its third-quarter earnings report. Wall Street also weighed earnings reports from Merrill Lynch & Co., Johnson & Johnson Co., and United Technologies Inc. Chicago Mercantile Exchange Holdings Inc.'s agreement to acquire fellow commodities exchange CBOT Holdings Inc. for $8 billion sent shares of both companies higher. In midmorning trading, the Dow gave up 80.13, or 0.67 percent, falling to 11,900.47. Broader stock indicators also declined. The Standard & Poor's 500 index was down 9.30, or 0.68 percent, at 1,359.75, and the Nasdaq composite index fell 31.20, or 1.32 percent, to 2,332.64.
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