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Stocks Slide As Rise In CPI Fuels Economic Worries

NEW YORK (MarketWatch) -- U.S. stocks on Friday swung sharply lower after the government reported consumer prices climbed 0.8% in November, higher than expected, bolstering worry the increasing cost of energy and other goods would hurt the economy.

Some analysts said the latest round of data lessens the chances of another Federal Reserve interest-rate cut next month.

"Though credit market turmoil will still argue for further easing in January, as does the weak Q4 factory figures in today's industrial production report with big downward revisions, the Fed will face heightened stakes given worsening inflation risks," said analysts at Action Economics.

Down more than 100 points early on, the Dow Jones Industrial Average was more recently down 89.5 points to 13,428.5, with 24 of its 30 components hit with early losses, including Intel Corp. , which slid 2.7%, and Home Depot Inc. , off 2.3%.

Another blue-chip, Citigroup Inc. , was down 1.8% following its downgrade by Moody's Investors Service in the wake of Citi's plan to move about $49 billion in assets from structured investment vehicles onto its balance sheet. .

The S&P 500 dropped 8.97 points to 1,479.44 and the Nasdaq Composite fell 15.35 points to 2,653.14.

Crude-oil futures fell 65 cents to $9.60 a barrel on the New York Mercantile Exchange, and gold was off $9.1 at $794.9 an ounce.

Volume on the New York Stock Exchange came to 146 million, and reached 257 million on the Nasdaq. Decliners topped advancers on both exchanges, by a ratio of more than 4 to 1 on the NYSE and exceeding a 3 to 1 ratio on the Nasdaq.

U.S. stocks remained under pressure Thursday, closing mixed, though Honeywell International's earnings forecasts helping lift sentiment on industrials. The Dow ended up 41.1 points, while the Nasdaq Composite Index ended the day down 2.65 points.

The consumer price index reading, led by higher prices for gasoline, proved higher than the 0.7% that analysts polled by MarketWatch expected, with the core rate up 0.3%, as expected. .

Later data had the Federal Reserve reporting a slight rise of 0.3% in U.S. industrial production in November, after dropping 0.7% the month before. .

European shares were mixed.

And in Asia, markets pulled broadly lower.

By Kate Gibson

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