US stocks edged lower on Thursday as weakness in the dollar raised worries about inflation two days after the Federal Reserve's aggressive interest rate cut. A lowered earnings outlook from package delivery company FedEx Corp raised doubts about growth in the economy.
In addition, the National Retail Federation said US holiday sales are expected to rise at their slowest pace in five years. Stocks briefly pared losses after stronger-than-expected data on factory activity in the US mid-Atlantic region.
"Interest rates have been reduced, but it's killing the dollar. This flooding of dollars to solve this credit crunch problem is obviously affecting the price of the dollar. I think that issue is weighing on the market today," said Stephen Massocca, co-chief executive at San Francisco-based investment bank Pacific Growth Equities.
The Dow Jones industrial average was down 16.59 points, or 0.12 percent, at 13,798.97. The Standard & Poor's 500 Index was down 3.55 points, or 0.23 percent, at 1,525.48. The Nasdaq Composite Index was down 2.84 points, or 0.11 percent, at 2,663.64.