Share prices were lower in early trade, after stronger than-expected inflation and labor data intensified the market's concerns that the Federal Reserve is poised to raise rates soon, dealers said.
At 10.21 am the DJIA June futures contract was down 51.27 at 10,450.30, the S&P 500 down 4.35 at 1,147.50, and the Nasdaq composite down 0.20 at 1,832.67.
Dealers said stocks had a mixed opening, but the major indices all soon fell into negative territory, pressured by the unexpectedly strong new data reports which raised fears of possible inflation and higher interest rates.
Investors fairly recently were encouraged by indications that the US economy is recovering, but lately have become more worried that a strong rebound will lead to higher interest rates and strained corporate earnings.
The DJIA earlier in the week reached its high for the year to date and investors were uncertain whether they could justify pushing the DJIA to still higher levels, given the changed rates environment.
The FOMC's adoption this week of a neutral stance, setting the stage for a possible rates increase later this year, has sparked concerns about strained prospects for corporate profits.
Those fears were intensified by news that initial claims for regular state unemployment benefits fell 12,000 to a seasonally adjusted 371,000 in the latest week, contrasting with Wall Street expectations for a fall of 3,000.
Consumer prices rose 0.2% in February, in line with expectations, while the core rate rose 0.3%, exceeding expectations.
Nestle SA subsidiary Alcon Inc was trading 55 cents above its IPO price at $33.53 on its first day of trade. The parent company is offering 69.75 million shares, representing a 23.25% stake, at $33.00 apiece. Alcon specializes in eyecare products.
Tomorrow Citigroup unit Travelers Property Casualty Corp will stage its IPO, which will be the largest ever for the insurance industry.
Citigroup was down 13 cents at $49.08.
Bristol-Myers regained some strength after yesterday declining by more than 15%, on news that a study concluded that its proposed Vanlev hypertension treatment is not more effective than Merck's Vasotec. The stock received new downgrades today from several brokerages. It was up 23 cents at $41.36.
AOL was down $1.02 at 24.18 after Lehman Brothers downgraded the share, and cut its first-quarter revenues estimates for the company, citing continued weak advertising revenues.
GE was down $1.32, or 3.3% lower, at 37.50 after its debt management strategy was questioned by a large bond fund manager.
GM was down 20 cents at $60.13 after the South Korean Commerce Minister announced that the auto maker's merger talks with Daewoo have reached a final stage.
Hughes Electronics, which is partly owned by GM, was up 29 cents at $16.41 after it said it expects to meet its target for first-quarter EBITDA.
Carnival was down 45 cents at $32.10 after it reported unchanged first-quarter EPS of 22 cents. The cruise line said its recent booking levels are well ahead of last year.
Compaq was up 15 cents at $10.97 after the company yesterday confirmed that its shareholders endorse the proposed merger with Hewlett-Packard.
US Airways Group was down 7 cents at $5.65 after joining other major US carriers in eliminating commissions for tickets issued by travel agents in the US and Canada.
Other airline stocks were lower, too, including AMR, up 1 cent at $25.71, and UAL, down 37 cents at 15.08.