By DANIEL WAGNER
U.S. stocks fell Friday, ending the longest winning streak for the Dow Jones industrial average in nearly 17 years.
The Dow Jones industrial average dropped 25.03 points, or 0.2 percent, to 14,514.11. The Standard & Poor's 500 index fell 2.53, or 0.2 percent, to 1,560.70. The Nasdaq composite index dropped 9.86, or 0.3 percent, to 3,249.07.
The S&P 500 closed just five points below its all-time closing high of 1,565, reached in October 2007. On Thursday, the Dow closed out a 10-day winning streak, its longest since November 1996.
The string of wins pushed the Dow up 484.65 points, or 3.4 percent, to a Thursday close of 14,539.14. The index's closing price on Feb. 28, just before the rally began, was 14,054.49.
Trading Friday was tentative because investors fear that rising inflation will cause the Federal Reserve to retreat from policies aimed at boosting markets. The government said that consumer prices increased in February at the fastest pace in more than three years.
The increase was driven by a spike in gas prices; the core index, which excludes the volatile energy and food categories, increased more modestly. But both figures rose 2 percent compared with a year earlier, enough to get investors' attention, said Peter Tchir, who runs the hedge fund TF Market Advisors.
"It's real and it's a drag, and I think people are growing concerned that it can get out of control quickly," Tchir said. He said signs of economic improvement and inflation "make them wonder if there will be continued market pressure on the Fed" to end its bond-buying programs.
The market's recent rally to multiyear highs was fueled in part by the Fed's efforts to keep interest rates low and encourage investment.
The Dow's long rally matched a 10-day winning streak that ended on Nov. 15, 1996. To find a longer uninterrupted series of gains, you would have to go back to Jan. 3, 1992, when the Dow rose for 11 consecutive days.
The index's longest winning streak was 14 days, ending June 14, 1897.
Stocks opened lower and extended their losses at 10 a.m. after a closely-watched index of consumer sentiment fell to its lowest level since the end of 2011. The University of Michigan's preliminary consumer sentiment index dropped 5.8 points to 71.8, according JPMorgan analyst Daniel Silver said in a note to clients.
Stocks reversed the losses briefly at midday, then drifted back down in the afternoon.
Traders are processing big banks' scores on "stress tests" administered by the Fed. The Fed said late Thursday that JPMorgan Chase (JPM) and Goldman Sachs (GS) both need better plans to cope with a severe recession. It gave them until September to revise their plans.
Still, the Fed allowed both banks to increase their dividends and buy back their stock, signaling that regulators believe the banks are fundamentally sound.
The stock of JPMorgan fell 98 cents, or 1.9 percent, to $50.02. Goldman's stock rose 82 cents, or 0.5 percent, to $154.84.
The yield on the 10-year Treasury note fell to 1.99 percent from 2.06 percent early Thursday, as demand increased for ultra-safe investments.
Among the other companies making big moves:
- Cruise ship operator Carnival Corp. (CCL) fell 78 cents, or 2.2 percent, to $34.95. The company said passengers have been booking vacations at a slower pace after a series of high-profile mishaps.
- Krispy Kreme Doughnuts Inc. (KKD) plunged after saying its fiscal fourth-quarter net income dropped sharply and fell short of expectations. The stock fell 41 cents, or 2.7 percent, to $14.54.
- Teen apparel chain Aeropostale Inc. (ARO) fell 76 cents, or 5.2 percent, to $13.75, after posting a loss in its fiscal fourth quarter and saying it expects another one in the current quarter.
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