Inflation Data, HP Earnings Dent Stocks

Wall Street ended the session in negative territory Friday after computer maker Hewlett-Packard's earnings and a government report showing rising consumer prices spooked investors.

The Dow Jones industrial average shed 45.70 points, or 0.43 percent, to end at 10,619.03. The Dow recovered from a steeper dive earlier in the session when it lost more than 70 points.

The Nasdaq Composite index ended lower 8.03 points, or 0.39 percent, to close at 2,037.93. The Standard & Poor's 500 index lost 2.95 points, or 0.26 percent, to close at 1,144.11.

For the week, the Dow fell 0.08 percent, the S&P 500 dipped 0.15 percent and the Nasdaq fell 0.76 percent. It was the fifth straight week of losses for the Nasdaq.

One factor influencing the lackluster performance was a government report before the open that showed the consumer price index, the most widely used gauge of U.S. inflation, rose 0.5 percent in January after a 0.2 percent rise the month before. The core CPI, which strips out volatile food and energy prices, gained 0.2 percent in January.

Economists had expected the overall CPI to rise 0.3 percent and the core index to tick up a mild 0.1 percent.

"We have overbought conditions, market valuations are ahead of fundamentals," said Jeff Swensen, senior trader at John Hancock Funds. "We are down on economic concerns, and Hewlett-Packard also lends to concern."

Investors were also concerned about Hewlett-Packard Co. (HPQ) after the company's release of earnings Thursday prompted analysts to sound a note of caution about its outlook. Hewlett's earnings, which rose 30 percent for the quarter, met market expectations.

But the stock fell on Friday, with analysts pointing to areas of concern, including slower growth in HP's imaging and printing group — its profit engine. Hewlett-Packard shares closed lower 73 cents, or 3.06 percent, at $23.13.

Other technology sector stocks were also lower. Cisco Systems (CSCO) was down 49 cents at $23.29. Applied Materials Inc. (AMAT) slipped 38 cents to $21.75.

Boeing Co. (BA) also weighed on the Dow after it said it would slow development work on a potentially huge U.S. air refueling tanker deal and fire up to 150 workers as a result of government reviews of the program.

The tanker deal had been repeatedly delayed, first over price concerns and later over ethical issues related to Boeing's hiring of a former Air Force procurement official.

Boeing fell 18 cents to $44.34 on the NYSE.

Business software maker BEA Systems Inc. (BEAS) climbed $1.08, or 8.4 percent, to $14.01. The company said quarterly profit and revenue rose on strong sales of its WebLogic Platform 8.1 software used for building Web-based programs.

Other shares trading heavily included the Coca-Cola Co. (KO ), which announced Thursday that its chairman and chief executive, Doug Daft, plans to retire at the end of the year. Coke's stock ended down 6 cents at $50.94.

Gillette Co. (G), the world's largest blade and razor maker, rose 67 cents, or 1.8 percent, to $38.44. The company stuck by its long-term 3 percent to 5 percent annual sales growth, excluding acquisitions and currency fluctuations.

Cherokee International Corp. (CHRK), which makes power supply products for computers, rose more than 14 percent in their stock market debut after an initial public offering.

The Cherokee shares closed their first day of public trading at $16.50, up $2.00 from the IPO price of $14.50 set on Thursday.

Volume was active with 1.47 billion shares changing hands on the New York Stock Exchange and 1.91 billion shares traded on the Nasdaq. Decliners outnumbered advancers by about 2 to 1 on the NYSE and by about 5 to 3 on the Nasdaq.

The Russell 2000 index of smaller companies fell 2.70, or 0.5 percent, to 579.89.

Overseas, Japan's Nikkei stock average fell 0.3 percent. In Europe, Britain's FTSE 100 closed flat, France's CAC-40 lost 0.7 percent for the session and Germany's DAX index finished 1.7 percent lower.

Reuters and The Associated Press contributed to this report.