Nagging worries about inflation bogged Wall Street down, with investors sending stocks lower as they tried to reconcile solid economic and...

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NEW YORK — Nagging worries about inflation bogged Wall Street down, with investors sending stocks lower as they tried to reconcile solid economic and earnings news, reports of anthrax discovered at the Pentagon, and a gloomy outlook on semiconductor stocks.

The Dow Jones industrial average fell 59.41 to 10,745.10.

Microsoft, one of the 30 Dow stocks, fell 20 cents to close at $24.91 a share. Boeing, also a Dow stock, gained 77 cents to $58.48.

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Broader stock indicators also lost ground. The Standard & Poor’s 500 index was down 9.08 at 1,197.75, and the tech-focused Nasdaq composite index, hurt by the Merrill Lynch report, lost 16.06 to 2,034.98.

Concerns that higher oil prices, which topped $55 per barrel, would accelerate inflation and lead to rising interest rates eroded investors’ confidence, and the Pentagon’s announcement about an anthrax discovery in its mailroom added to the unease. The tech sector was hit particularly hard after a Merrill Lynch analyst said growth in chip stocks would be stalled for much of the year.

That made it difficult for Wall Street to rise on good news from the retail sector. While the 0.5 percent growth in February retail sales fell slightly below Wall Street expectations, the Commerce Department revised its January figure upward, and auto sales were surprisingly strong in both months. Record earnings from Lehman Brothers were likewise discounted by midday, when stocks turned firmly negative.

“There’s not enough positive news to get investors to commit to new positions at this point,” said Michael Sheldon, chief market strategist at Spencer Clarke. “There’s a malaise hanging over the market right now without much of a catalyst to move higher.”

Oil prices rose as investors worried that OPEC may not follow Saudi Arabia’s lead and increase oil production. A barrel of light crude settled at $55.05, up 10 cents, on the New York Mercantile Exchange.

Wall Street paid close attention to Federal Reserve Chairman Alan Greenspan’s testimony on Capitol Hill, hoping to hear his latest views on inflation and interest rates. Greenspan, whose topic yesterday was Social Security, warned that federal budget deficits, not inflation, remained the greatest threat to the economy.

After a downbeat Merrill Lynch report on semiconductor stocks, Dow component and chip bellwether Intel fell 39 cents to $23.88 and rival Advanced Micro Devices lost 37 cents to $16.07.

“The Nasdaq didn’t even see much of the upside we had earlier in the day because of the semis,” said Bill Groenveld, head trader for vFinance Investments, about the reaction to the Merrill report. “There’s just so much stuff out there that nobody can make heads or tails of, you’re just going to go lower out of inertia.”