US stocks close lower, ending Dow's 10-day rally

(AP) - United States (US) stocks fell on 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 per cent, to 14,514.11. The Standard & Poor's 500 index fell 2.53, or 0.2 per cent, to 1,560.70. The Nasdaq composite index dropped 9.86, or 0.3 per cent, 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 per cent, 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 on 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 per cent compared with a year earlier, enough to get investors' attention, said Mr 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," Mr 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 fuelled 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.