Stocks finish mixed as inflation remains concern

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NEW YORK -- Stocks finished mixed Wednesday after consumer prices showed a larger-than-expected increase in January and minutes from the Federal Reserve's last meeting showed the central bank considered but decided against taking a more dovish tone on the threat of inflation.

The Nasdaq composite index closed at a new high for the year, while the Dow Jones industrials fell.

Inflation again commanded Wall Street's attention, with the latest readings leaving some investors unnerved. Only last week Wall Street rallied after Federal Reserve Chairman Ben Bernanke told Congress that inflation appeared to be moderating as the economy was showing sustainable growth. The Fed minutes showed policy-makers saw economic threats spurred by the weak housing market were easing but not sufficiently to sound the all-clear on inflation.

The Labor Department report that the consumer price index rose 0.2% in January came as a surprise to Wall Street, which had expected an 0.1% increase. Declines in energy prices couldn't fully offset a rise in costs of medical care, food and airline tickets. The core figure, which excludes often volatile food and energy prices, rose a greater-than-expected 0.3%.

The inflation news and Fed comments followed a profit report from Hewlett-Packard Co. that dampened sentiment on Wall Street.

"We find it hard to see how the economy can continue to do well as it has without interest rates being under some upward pressure and if interest rates do stay where they are or in fact go down it's probably because the economy will slow down," said Denis Amato, chief investment officer at Ancora Advisors.

According to preliminary calculations, the Dow Jones industrial average fell 48.23, or 0.38%, to 12,738.41.

Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index was down 2.05, or 0.14%, at 1,457.63, and the Nasdaq composite index rose 5.38, or 0.21%, to 2,518.42. The Nasdaq hit its highest level of the year -- 2,518.42; the previous trading high for the year was 2,514.22.
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