US stocks fall slightly

Stocks were modestly lower on Wall Street today as investors consolidated their holdings despite solid corporate earnings reports and the biggest drop in consumer prices in 56 years.

Falling petrol prices pushed November’s consumer price index down 0.6%, the biggest one-month decline since July 1949, according to the Labour Department.

Investors considered the drop a good omen for the Christmas shopping season. Core CPI, with food and fuel prices removed, rose a modest 0.2%, in line with economists’ forecasts.

With the Federal Reserve closely watching inflation, the CPI figures bode well for future interest rates.

“This gives the Fed a lot more flexibility, a little more elbow room in figuring out when to stop raising rates,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

“Continuing stable inflation figures like the ones we saw today helps everybody.”

Nevertheless, investors sold off riskier small-cap stocks, along with technology and energy shares that led the November rally, and moved to larger, more established companies – apparently hedging their bets against Wall Street’s now-traditional January letdown.

The Dow Jones industrial average fell 1.84, or 0.02%, to 10,881.67.

Broader stock indicators also moved lower.

The Standard & Poor’s 500 index dropped 1.80, or 0.14%, to 1,270.94, and the Nasdaq composite index lost 1.96, or 0.09%, to close at 2,260.63.