New York – Stocks slid today after Federal Reserve Chairman Ben Bernanke chided investors who may have looked past long-standing concerns about inflation following comments last week from the central bank. The Dow Jones industrials fell more than 100 points, their third straight session of declines.
Rising oil prices and a weaker-than-expected rise in orders for large manufactured goods compounded investors’ concerns.
In Capitol Hill testimony, Bernanke said while core inflation slowed “modestly” in the second half of 2006, recent readings remain “uncomfortably high.” He also said troubles among some mortgage lenders that cater to those with poor credit don’t appear to have spread to the broader economy, though he added that the situation warrants further observation.
Stocks rallied last week after investors interpreted language from the Fed as opening the way to the possibility of a reduction in interest rates. But concerns about stubborn inflation could reverse investors’ hopes for a reduction in rates, even as the economy continues to cool.
“I think what the Fed is trying to tell us is that it is between a rock and a hard place. And when you’re between and a rock and a hard place you just can’t move,” said Drew Matus, senior economist at Lehman Brothers Holdings Inc.
According to preliminary calculations, the Dow industrials fell 101.74, or 0.82 percent, to 12,295.71. The Dow had fallen as much as 140 points before recovering.
Broader stock indicators also fell. The Standard & Poor’s 500 index fell 11.63, or 0.81 percent, to 1,416.98, and the Nasdaq composite index fell 20.33, or 0.83 percent, to 2,417.10.
