Stocks Fall on Inflation Report

U.S. stocks fell Friday as a drop in oil prices dragged down energy shares and strong consumer price inflation data dented hopes for an interest-rate cut any time soon.

The Dow Jones industrial average fell 49.27 points, or 0.41 percent, to end at 12,110.41. The Standard & Poor's 500 Index dropped 5.33 points, or 0.38 percent, to 1,386.95. The Nasdaq Composite Index slipped 6.04 points, or 0.25 percent, to 2,372.66.

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All three major U.S. stock indexes ended down for the week, which was dominated by worries about a possible spread of the subprime mortgage market crisis into other economic sectors.

Major energy companies, including Exxon Mobil Corp. (XOM), were among the top weights on the S&P 500 index.

Big investment banks also declined, despite strong results reported this week by Goldman Sachs Group Inc. (GS), Lehman Brothers Holdings Inc. (LEH) and Bear Stearns Cos. (BSC) Inc.

"The concern has shifted to the subprime lending market, it's in the news every day, all day. The trouble is people don't know how far the problems are going to extend," said Brian Gendreau, investment strategist at ING Investment Management in New York.

For the week, the Dow dropped 1.4 percent, the S&P 500 fell 1.1 percent and the Nasdaq declined 0.6 percent.

A government report showed overall February consumer prices rose faster than analysts estimated, while core CPI, which strips out volatile food and energy costs, matched forecasts.

Analysts said the data added to views that the Federal Reserve would not be lowering interest rates soon.

Stock investors have been jittery over the inflation picture since a report Thursday showed higher-than-expected producer prices in February.

"When you come in with numbers like that, it's going to hurt the theory of a cut in rates," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

Citigroup (C) shares were down 1.2 percent, or 60 cents, at $49.53 on the NYSE and were the second-biggest drag on the S&P 500. Lehman Brothers' stock was down 2.5 percent, or $1.84, at $71.19 on the NYSE. Bear Stearns was down 2 percent, or $3.02, at $145.48.

Goldman (GS) shares fell 0.9 percent, or $1.89, to $199.

Shares of Exxon declined 1.2 percent, or 83 cents, to $69.86. U.S. crude fell 44 cents to settle at $57.11 a barrel. It was the lowest level since late January for the April contract, which expires on Tuesday.

The shares of some subprime mortgage lenders perked up as several players received help that may keep them in business, but analysts said the gains may not be signs that the industry is out of the woods yet.

Accredited Home Lenders (LEND) said it reached an agreement to sell $2.7 billion in loans at a big discount to ease pressure from margin calls. Accredited Home Lenders' shares shot up 15.6 percent, or $1.47, to $10.90 on the Nasdaq.

Trading was heavy on the New York Stock Exchange, with about 2.08 billion shares changing hands, above last year's estimated daily average of 1.84 billion, while on Nasdaq, about 2.09 billion shares traded, above last year's daily average of 2.02 billion.

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Declining stocks outnumbered advancing ones by a ratio of about 5 to 3 on the NYSE and by about 3 to 2 on Nasdaq.