US stocks fell on Friday after a sharp rise in consumer prices stirred inflation fears, but the market partly recovered after Goldman Sachs upgraded Citigroup's debt, helping financial shares.
Citigroup had fallen earlier after the bank said on Thursday it plans to take $49 billion of structured investment vehicles onto its balance sheer Moody's Investors Service cut the debt ratings of the largest US bank. But the stock rose after Goldman Sachs lifted its rating on Citigroup's debt, citing the chief executive's measures to raise capital levels in the first quarter of 2008.
Banking stocks were the biggest drag after November Consumer Price Index data suggested simmering inflation may make it harder for the Federal Reserve to cut rates. "Obviously, Goldman upgrading Citi is taking the pressure off there," said Bennett Gaeger, managing director at Stifel Nicolaus in Baltimore.
The Dow Jones industrial average was down 54.22 points, or 0.40 percent, at 13,463.74. The Standard & Poor's 500 Index was down 5.59 points, or 0.38 percent, at 1,482.82. The Nasdaq Composite Index was down 0.87 points, or 0.03 percent, at 2,667.62.
Citigroup shares rose 1.7 percent to $31.54 on the NYSE. Black & Decker shares were down after the maker of power tools and hardware said that weaker-than-expected business conditions would hurt results for the current quarter. Black & Decker fell 2.8 percent to $78.14.
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