U.S. stocks tumbled Thursday, with the Nasdaq suffering its longest losing streak in 12 years, as concern about inflation and rising interest rates kept investors wary after a sell-off Wednesday.

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The Dow Jones industrial average was down 77.32 points, or 0.69 percent, to end at 11,128.29. The Standard & Poor's 500 Index was down 8.51 points, or 0.67 percent, to finish at 1,261.81. The Nasdaq Composite Index was down 15.48 points, or 0.70 percent, to close at 2,180.32.

Trading was volatile, with the three major indexes wavering between negative and positive through most of the session as Richmond Federal Reserve President Jeffrey Lacker said consumer prices data released Wednesday make the possibility of a pause in interest-rate hikes less likely.

The selling picked up speed in the session's final half hour. For the second day, investors sold shares of large-cap insurers, industrial conglomerates and banks, all of which are sensitive to changes in benchmark interest rates.

Caterpillar Inc. (CAT) and American International Group Inc. (AIG) were the biggest drags on the blue-chip Dow.

"There's no reason to expect the environment to get much better from here," said Edgar Peters, chief investment officer at PanAgora Asset Management Inc. in Boston, with $15 billion in assets. "Earnings are going to fall and interest rates are going to rise. How can that bode well for stocks?"

The Nasdaq closed lower for the eighth consecutive session, its longest losing streak since September 1994.

A surprisingly strong 0.6 percent rise in consumer prices Wednesday triggered a plunge in both stocks and U.S. Treasury bonds as investors bet that the economic data would lead the Fed to keep raising rates to head off inflation.

The Consumer Price Index rose on a spike in energy costs last month and was up 3.5 percent in the past 12 months.

After a tentative rebound in stocks for most of Thursday's session, the benchmark indexes turned sharply lower in the last trading hour before the closing bell.

"There's lots of technical reasons why (stocks turned), but the market is basically pricing in some higher inflationary expectations," said Todd Clark, director of stock trading at Nollenberger Capital Partners in San Francisco.

Caterpillar slid 1.7 percent, or $1.29, to $74.62, while shares of AIG dropped 1.5 percent, or 94 cents, to $61.56. JPMorgan Chase & Co. (JPM) dropped 1.2 percent, or 51 cents, to $42.74.

Meanwhile, some stocks posted strong gains.

Sears Holding Corp. (SHLD) jumped almost 13 percent, or $17.89, to $155.85 on Nasdaq. The retailer reported a bigger-than-expected quarterly profit.

Merck & Co. Inc. (MRK), a Dow component, rose on news that the drugmaker's vaccine to block a sexually transmitted virus was backed by an advisory panel of the U.S. Food and Drug Administration. Merck gained 2.3 percent, or 79 cents, to $35.13 on the New York Stock Exchange.

Shares of Burger King Holdings Inc. , the world's second-largest hamburger chain, made their market debut on the New York Stock Exchange. The stock gained 2.9 percent, or 50 cents, to close at $17.50 on the NYSE, after hitting a session high at $18.24.

Burger King's initial public offering of 25 million shares, which represents a 19 percent stake in the company, was worth about $425 million.

Trading was heavy on the NYSE, with about 1.83 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 2.08 billion shares traded, above last year's daily average of 1.80 billion.

Declining stocks outnumbered advancing ones by a ratio of about 5 to 3 on both the NYSE and the Nasdaq.

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