NEW YORK — The stock market fell Tuesday for the first time in five days and Treasurys slipped after a jump in inflation stoked concerns that the Federal Reserve would be forced to raise interest rates.
Stocks extended their losses late in the day Tuesday after General Electric forecast that revenue and earnings would be largely flat in 2010.
Major stocks indexes fell 0.5 percent from 14-month highs, including the Dow Jones industrial average, which lost 49 points.
Trading was subdued as Fed policymakers gathered for a two-day meeting on interest rates. The Fed isn’t expected to raise rates from their record low level, but the day’s economic reports brought reminders that the central bank could be forced to raise rates sooner than expected.
The government said wholesale prices jumped 1.8 percent last month, more than double the gain analysts expected. Core inflation, which excludes often-volatile food and energy costs, rose 0.5 percent, the biggest increase in more than a year.
Analysts said the increase in food and energy costs was likely a concern for Fed officials.
“They’re the twin pistons of inflation,” said Christopher Wolf, managing partner and co-chief investment officer at Cogo Wolf Asset Management in San Francisco.
The Dow fell 49.05, or 0.5 percent, to 10,452.00. The Standard & Poor’s 500 index fell 6.18, or 0.6 percent, to 1,107.93, and the Nasdaq composite index fell 11.05, or 0.5 percent, to 2,201.05.
The Dow and S&P closed Monday at their highest levels since October 2008 as concerns eased about global debt.
Meanwhile, the Fed said industrial production rose 0.8 percent in November, the biggest gain since August. That rise meant factories ran at higher capacity.
The portion of capacity being used remains below average, but prices could rise if factories start seeing demand increase.
The reports put inflation on investors’ screens. If prices start rising and the Fed raises rates, it could choke off a nascent economic recovery.
