Analysts say stock markets are likely to remain volatile
US consumer prices rose in October as energy and food prices shot up, official data has shown.
Although in line with forecasts, the inflation data knocked US stock prices lower as investors worried about the strength of consumer spending.
The US Labor Department said its consumer price index rose 0.3% in October, while core prices, excluding food and energy costs, rose 0.2%.
Investors were also cautious amid continued concern about credit markets.
Rising inflation, with higher fuel prices a major factor, could make consumers cut back spending and prevent the Federal Reserve from lowing interest rates further in coming months to shore up the economy.
A downbeat outlook from retailer JC Penney also raised fears that problems in the US housing market were taking their toll on shoppers.
JC Penney shares declined 2% to $45.84 after the retailer cut its fourth-quarter profit outlook by at least 25%.
The Dow Jones industrial average fell 45.12 points, or 0.34 %, to 13,185.89 in early trade.
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