Nervous investors collected profits and sent stocks lower Tuesday, wiping out an early advance amid conflicting signals about inflation...

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NEW YORK — Nervous investors collected profits and sent stocks lower Tuesday, wiping out an early advance amid conflicting signals about inflation and consumer spending.


At the close of trading, the Dow lost 10.73 to 10,686.44. During the session, the Dow rose nearly 45 points to reach its highest level since March 15.


Microsoft, one of the 30 Dow stocks, added 23 cents to close at $27.50 a share. Boeing, also a Dow stock, gained 77 cents to $67.


Broader stock indicators also gave up their gains. The Standard & Poor’s 500 index finished down 4.75 at 1,229.01, and the Nasdaq composite index declined 14.21 to 2,186.74.


The market pulled back when the Dow reached an eight-month high shortly after midday. Investors have been uneasy for months about inflation and soaring oil prices, and their anxiety was fed by a Labor Department report that energy costs led a jump in wholesale prices last month. Many decided the safest strategy was to sell.


Meanwhile, a better-than-expected monthly retail sales report that might have supported the market was undercut by a weak sales outlook from Target, which also clouded strong results at Home Depot. Wall Street’s retreat also came despite crude oil settling below $57 a barrel for the first time since June 30. A barrel of light crude dropped 71 cents to $56.98 on the New York Mercantile Exchange.


Investors had little reaction to comments from Federal Reserve chair nominee Ben Bernanke, who told a Senate committee that his top priority will be keeping current Chairman Alan Greenspan’s policy of fighting inflation.


It was the specter of higher prices that unnerved Wall Street. The Labor Department’s producer price index — a measure of wholesale prices often seen as a barometer of future inflation — grew 0.7 percent in October as soaring energy prices drove up manufacturers’ costs. Economists were expecting the index to be unchanged last month.


But core PPI — setting aside volatile food and energy prices — retreated 0.3 percent, compared with expectations for a 0.2 percent gain and September’s 0.3 percent growth, the department added.


Meanwhile, the Commerce Department said retail sales rose 0.9 percent in October, excluding the effect of a recent slide in auto demand. Economists were looking for a 0.3 percent gain, following a 1.1 percent rise the month before.


Including car sales, retail sales were down 0.1 percent, the Commerce Department said. That reversed a 0.3 percent increase in September but trounced estimates for a 0.7 percent decrease.


Still, some analysts remained upbeat about consumer spending as oil and gas prices pull back from record September levels and their impact eases.


“Once things get through the day-to-day digestion period, broadly speaking the market is still pretty good,” said Jack Caffrey, equity strategist for JPMorgan Private Bank. “The trend to lower energy erases some of the fears of how long consumers can hold up. It gives the market enough to fear but sets us up for gradual appreciation going into year-end.”