NEW YORK — Wall Street struggled through an erratic session Friday as investors overcame some of their dejection over interest rates and and gave stocks at least a temporary bottom to their slide.
A new report on consumer prices showed that inflation could become more of a problem, which kept some buyers away from stocks, worried that the Federal Reserve would not only raise interest rates at its June meeting, but might raise them higher than the quarter percentage point most analysts predict.
"At this point, the market's going to sell off on any remotely negative news," said Lincoln Anderson, chief investment officer at LPL Financial Services. "The overall thrust of the economic news is very good, but the markets are picking out the negative news and overdiscounting on the interest rates."
But some investors used the opportunity to buy blue chips such as financials and other growth stocks — stocks that had been hit hard in the selloff. That interest kept stocks from falling further.
In late afternoon trading, the Dow Jones industrial average lost 8.80, or 0.1 percent, to 10,001.94, after losing more than 72 points earlier in the session.
Broader stock indicators were mixed. The Standard & Poor's 500 index was down 0.71, or 0.1 percent, at 1,095.73, and the Nasdaq composite index lost 18.27, or 1 percent, at 1,907.76.
Should the indexes hold, the Dow would end the week in negative territory after Monday's 127-point selloff. It would be the third straight week of losses for the Dow. The Nasdaq was also primed for a third down week, while the S&P 500 had a chance to end the week in positive territory.
While the Labor Department's Consumer Price Index rose 0.4 percent, less than economists had expected, the "core" CPI — excluding food and fuel costs — rose 0.3 percent, which was higher than expected. While the figures were down slightly from March, the core CPI figure showed that inflation, which had been long dormant, was gaining strength.
Businesses continue to thrive, according to data from the Commerce Department. Business sales were up 2.9 percent in March, while business inventories climbed 0.7 percent the same month. However, the sales figure could be due to companies raising prices, triggering inflation, rather than increased demand.
"Overall, these numbers look fine to me," Anderson said. "Sure, you'll see interest rates go up, but you've got to expect that. We're in a sustained recovery that's highly unlikely to be derailed."
Consumers don't seem to share in that bullish outlook. The University of Michigan's subscription-only consumer sentiment index remained steady at 94.2 in May. Analysts had been expecting a rating of 96.
"The market's had to deal with a lot of things, from interest rates to Iraq, the election, figuring out the economic numbers," said Kevin Caron, market strategist at Ryan, Beck & Co. "Given all these things had to take place in a relatively short period of time, the fact that we've just kind of gone sideways isn't a sign of weakness. It's a normal sideways motion for a market that's had to diges ta lot of things."
Investor sentiment for technology bellwether Dell Inc. waned in the wake of its latest earnings. While the computer manufacturer matched Wall Street estimates with a 22 percent increase in first quarter profits, the company's inventory and second quarter outlook were worse than expected. Dell dropped $1.15 to $34.65.
Cisco Systems Inc. lost 49 cents to $21.27 after its board authorized an additional $5 billion for the company's stock buyback program.
Defense contractor Raytheon Co. was up 41 cents at $33.10 after it announced it will pay $410 million to settle a lawsuit in which shareholders claimed the company misled investors about its financial troubles.
Advancing issues outnumbered decliners by more than 8 to 5 on the New York Stock Exchange, where volume came to 862.10 million shares, compared with 883.31 million at the same point Thursday.
The Russell 2000 index of smaller companies was down 0.68, or 0.1 percent, at 546.49.
Overseas, Japan's Nikkei stock average rose 0.2 percent. In afternoon trading, Britain's FTSE 100 closed down 0.3 percent, France's CAC-40 slipped 0.3 percent for the session and Germany's DAX index lost 0.6 percent in late trading.