Stocks Plunge to End Off Week

Big consumer price inflation builds concern rate cuts are over
By Jonas Oransky,  Newser Staff
Posted Dec 14, 2007 3:51 PM CST
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(Newser) – The Dow dived 178.11 points today to 13,339.85 after a 0.8% spike in the consumer price index, the biggest since September 2005, sparked concern that the era of rate cuts might be over. Inflation was “the 800-pound gorilla in the room,” one strategist told the Journal. The Nasdaq slid 32.75 to 2,635.74, and the S&P 500 fell 20.46 to 1,467.95.

There was even talk of rising interest rates: One strategist sniped about the “inflation hawks” on the Board of Governors. The Dow fell 2.1% for the week, the largest weekly drop in 2 months, MarketWatch reports. Meanwhile, investors were relieved that Citigroup took steps to balance its books, and the dollar rebounded as interest rates looked less fickle.