NEW YORK (CNN/Money) -
Stocks ended a tumultuous session mixed Wednesday, as falling oil prices failed to dent persistent worries about a pickup in inflation.
Treasury bonds rose after Tuesday's big drop and gold prices tumbled. The dollar rallied versus other major currencies.
The Dow Jones industrial average (down 14.49 to 10,456.02, Charts) lost a few points and the broader Standard & Poor's 500 (up 0.82 to 1,172.53, Charts) index was flat. Both closed at the lowest point since late January Tuesday.
The Nasdaq composite (up 0.88 to 1,990.22, Charts) ended unchanged, after trying to rally several times during the session. On Tuesday, the Nasdaq ended at its lowest point since early November 2004.
"There's very little buying interest right now and there are concerns with the Dow and S&P 500 falling close to the January lows," said John Hughes, market analyst at Shields & Co.
Hughes said that the flatness of the major gauges Wednesday masks a deeper weakness in the market. That weakness was evidenced by the negative market breadth, he added, and the fact that the S&P 500's leading sectors -- including energy and financials -- were decidedly negative.
Like many interest-rate sensitive sectors, energy and financials saw broad declines Wednesday.
Thursday brings the report on durable goods orders. Orders are expected to have risen 0.8 percent after falling 1.3 percent in January.
Thursday also brings the read on new home sales for February. Sales are seen rising to a 1.150 million unit annual rate in February from a 1.106 million unit rate in January.
All financial markets are closed Friday for Good Friday, while the bond market closes early Thursday.
On the New York Stock Exchange, decliners trounced advancers by more than three to one on volume of 1.80 billion shares. On the Nasdaq, losers beat winners nearly two to one as 1.78 billion shares changed hands.
Worries about inflation
The notion that the Federal Reserve will need to speed up its rate-hike campaign kicked into high gear Tuesday, following some hawkish comments from policy-makers about inflation. And Wall Street's case of inflation jitters got worse Wednesday after the government reported a bigger-than-expected rise in consumer prices last month.
This has created a shift in the market that's under the surface, said John Forelli, a portfolio manager at Independence Investments.
"The market was really shaken by the Fed language," Forelli said. "You're seeing a move into more defensive names and a move out of economically sensitive issues."
The drop in oil prices Wednesday was a comfort, but was not enough to dispel worries about inflation and rising rates, which tend to cool off the economy, but also hurt corporate profits and ultimately stock prices.
The Fed on Tuesday opted to boost its target for the Fed funds rate, an overnight bank lending rate, by a quarter percentage point to 2.75 percent, its seventh consecutive rate hike.
But what was more surprising was the change in language in its statement, in which the policy-makers said that pressure on inflation has picked up in recent months and that pricing power is more clear.
That point was reiterated Wednesday, with the release of the February Consumer Price Index (CPI).
CPI rose 0.4 percent last month, the biggest gain in four months, after rising 0.3 percent in January. Economists surveyed by Briefing.com thought it would rise 0.3 percent. The "core" CPI, which excludes food and energy, rose 0.3 percent in February, topping forecasts for an increase of 0.2 percent. The core was up 0.2 percent in January.
(For a look at where prices are jumping the most, click here.)
U.S. light crude oil for May delivery tumbled $2.22 to settle at $53.81 a barrel on the New York Mercantile Exchange, following the release of the weekly oil inventory report. Crude oil inventories rose more than expected, but gas and distillates -- used in heating oil -- fell.
Existing home sales in February slipped to a 6.79 million unit annual rate from a 6.82 million unit rate in January, according to a report released around 30 minutes after the start of trading. Economists thought sales would fall to a 6.7 million unit rate.
Protecting the Nasdaq from losses was strength in select tech sectors, including chips which bounced after several down sessions.
The Philadelphia Semiconductor (up 4.77 to 414.86, Charts) index, or the SOX, rose 1.6 percent. Intel (up $0.37 to $23.39, Research) rose 2 percent.
But a number of other big cap techs stalled or slid, keeping the Nasdaq near breakeven. Among the decliners, Cisco Systems (down $0.18 to $17.74, Research) lost 1 percent and the Internet sector was generally weaker across-the-board.
But oil, financials and other interest-rate sensitive issues declined, keeping the broader market weaker.
General Motors (down $0.88 to $28.66, Research) fell 3 percent and was the Dow's biggest decliner. The automaker is in talks to sell its commercial mortgage unit, the Wall Street Journal reported early Wednesday. The deal could bring GM $1 billion or more.
Caterpillar (down $1.07 to $93.64, Research) and Alcoa (down $0.57 to $30.39, Research), vulnerable to a rising rate environment, both slid, as did oil sector behemoth Exxon Mobil (down $0.81 to $60.09, Research).
The oil sector was broadly weaker, pressured by falling oil prices and corporate news.
TXU (down $0.65 to $76.90, Research) slipped after it was subpoenaed by U.S. regulators looking for information regarding financial problems at its European operations. AES (down $0.91 to $16.04, Research) fell after Smith Barney Citigroup downgraded it to "hold" from "buy," due to regulatory and interest rate risks.
The Philadelphia Oil Services (Charts) index dropped 3.1 percent.
Oracle (unchanged at $12.49, Research) was flat. Late Tuesday, the business software maker reported quarterly earnings of 10 cents a year, down from 12 cents a year earlier, due to charges associated with its recent purchase of PeopleSoft. Stripping out the charges, earnings were 16 cents per share, a penny more than expected.
Treasury prices rose, after having fallen sharply Tuesday after the Fed comments. The yield on the 10-year note fell to 4.59 percent from 4.63 percent late Tuesday.
In currency trading, the dollar gained versus the euro and yen.
COMEX gold fell $6.20 to settle at $425.40 an ounce, falling with other dollar-traded commodities.
In global trade, Asian-Pacific and European markets ended lower.