Technology and small-cap stocks fell sharply Friday and all three major indicators recorded a third straight losing week. Higher oil prices contributed to more moderate losses in other sectors.
The Dow Jones industrial average fell 23.38, or 0.2 percent, to 10,139.78. The Standard & Poor's 500-stock index was down 5.30, or 0.5 percent, at 1101.39, and the Nasdaq composite index fell 29.56, or 1.5 percent, to 1883.15. It was the lowest close on the Nasdaq since May 17.
For the week, the Dow fell 0.7 percent, the S&P dropped 1 percent and the Nasdaq was down 3.3 percent. It was the third straight down week for the Nasdaq, the fourth for the Dow and the fifth for the S&P 500.
While investors were cheered by a better-than-expected reading in the Labor Department's consumer price index, they are increasingly preoccupied with earnings, and so they feared that lower prices would translate into lower profits.
The CPI is considered one of the best measures of consumer prices and inflation. The index rose just 0.3 percent in June -- half the previous month's rise. "Core" prices, excluding energy and food, rose just 0.1 percent.
"This should be good news. It takes inflation off the table as a concern, at least for now," said Daniel Portanova, managing director of Gartmore Separate Accounts. "But I think the bigger question now is the sustainability of the recovery and profits going forward."
International Business Machines and Dell both issued upbeat reports and were exceptions to Friday's trend among technology stocks. IBM not only beat Wall Street expectations by 4 cents per share in the second quarter, but also gave a strong positive outlook for the rest of the year. Rival Dell also came out with a bullish outlook before its Aug. 12 earnings report. IBM climbed 26 cents, to $84.28, while Dell rose 55 cents, to $35.42.
Bank holding company KeyCorp fell 36 cents, to $29.09, despite beating its second-quarter estimates by 2 cents per share.
Toymaker Hasbro missed its earnings expectations by 2 cents per share despite a strong cost-cutting effort, blaming the miss on declines in its Beyblade products. Hasbro fell 4 cents, to $17.96.
* The New York Stock Exchange composite index fell 1.10, to 6456.02; the American Stock Exchange index rose 22.46, to 1272.96; and the Russell 2000 index of smaller-company stocks fell 6.68, to 555.48.
* Advancing issues outnumbered declining ones by 10 to 9 on the NYSE, where trading volume rose to 1.45 billion shares, from 1.4 billion on Thursday. On the Nasdaq Stock Market, decliners outnumbered advancers by 9 to 4 and volume totaled 1.77 billion, up from 1.64 billion.
* The price of the Treasury's 10-year note rose $10.31 per $1,000 invested, and its yield fell to 4.36 percent, from 4.48 percent on Thursday.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 108.68 yen, down from 109.77 late Thursday, and a euro bought $1.2458, up from $1.2344.
* Light, sweet crude oil for August delivery settled at $41.25, up 48 cents, on the New York Mercantile Exchange.
* Gold for current delivery rose to $406.60 a troy ounce, from $404.20 on Thursday, on the New York Mercantile Exchange's Commodity Exchange.