Stocks hurt by inflation report

NEW YORK (CNNMoney.com) -- Inflation concerns plagued Wall Street at the start of trading Friday after November consumer prices came in a little above expectations.

The Dow Jones industrial average lost 0.6 percent. The Nasdaq composite index slid 0.7 percent. The Standard & Poor's 500 index was 0.4 percent lower.

In corporate news, airline stocks could get a lift Friday from news that JetBlue (JBLU) would receive $300 million from German airline Lufthansa for a 19 percent stake in low-cost carrier. JetBlue will issue additional shares for Lufthansa's stake. But even with that dilution, shares of JetBlue gained 1 percent in after-hours trading Thursday, as did the shares of most U.S. airlines. Lufthansa shares fell 1.3 percent in Frankfurt trading, though.

Drugmaker Merck (MRK, Fortune 500) encountered a setback on Thursday, when a FDA panel shot down its bid for over-the-counter sales of its cholesterol drug Mevacor. Shares of the Dow component lost 0.6 percent in after-hours trading on the news.

Palm (PALM), which has seen weak sales of the Treo smart phones, laid off about 10 percent of its work force this week to cut expenses, according to published reports. The company issued a statement late Thursday confirming some layoffs.

Telecom Qwest (Q, Fortune 500) saw shares jump nearly 7 percent in after-hours trading Thursday after it announced it will begin paying a dividend, the first time it has done so since 2001.

Top executives of Fannie Mae (FNM) will face shareholders on Friday at its annual meeting, which is bound to cast more light on problems in the mortgage finance market.