Stocks Fall Amid Inflation Concerns

NEW YORK (AP) -- Stocks fell Wednesday after Federal Reserve Chairman Ben Bernanke chided investors who may have looked past long-standing concerns about inflation. The Dow Jones industrials fell nearly 100 points, the third straight session of declines.

A rise in oil prices to a six-month high and a weaker-than-expected rise in orders for large manufactured goods compounded investors' concerns Wednesday.
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 the situation requires 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.
The Dow industrials fell 96.93, or 0.78 percent, to 12,300.36. The Dow fell by as much as 140 points after the Fed released Bernanke's prepared remarks for his testimony.