NEW YORK – Stocks slid Tuesday after comments about inflation by a Federal Reserve official sparked increased concern about higher-interest rates.
Dallas Federal Reserve Bank President Richard Fisher said the United States is facing inflation pressures and needs to be "especially vigilant on that front."
"The Fed is going to have to fight inflation and higher rates are generally not good for the markets," said Tom Schrader, managing director of U.S. equity trading at Legg Mason Wood Walker in Baltimore. "If Fisher is out there talking bearishly, that's not good for the market."
The Dow Jones industrial average (search) was down 71.16 points, or 0.68 percent, at 10,464.32. The Standard & Poor's 500 Index (search) was down 8.64 points, or 0.70 percent, at 1,218.06. The technology-laced Nasdaq Composite Index (search) was down 10.76 points, or 0.50 percent, at 2,144.67.
Procter & Gamble shares fell 1.8 percent to $58.22 on the New York Stock Exchange after Citigroup lowered its rating on the stock to "hold' from "buy" a day after the company said its acquisition of Gillette & Co. will hurt earnings per share for the next two years.
Consumer products maker Clorox cut its earnings outlook, citing high energy prices and the effects of the recent hurricanes.
Its shares slipped 1.5 percent to $53.77 on the NYSE.
Printer maker Lexmark International Inc. (LXK) also warned profits would likely be about half the level it forecast in July, as aggressive pricing by Hewlett-Packard Co. has taken a toll on margins. Lexmark shares plunged 29.3 percent to $43.11 on the NYSE.
Hewlett-Packard (HPQ), a Dow component, slipped 1.1 percent to $28.59, also in NYSE trading.