Wall Street pulled back for the third straight day Wednesday as investors still uneasy about the economy sold off after a Federal Reserve...

Share story

NEW YORK — Wall Street pulled back for the third straight day Wednesday as investors still uneasy about the economy sold off after a Federal Reserve official suggested rising inflation could prevent the central bank from making further interest-rate cuts.

The Dow Jones industrial average fell 65.03 to 12,200.10, after rising more than 100 points in earlier trading.

Microsoft, one of the 30 Dow stocks, fell 55 cents to close at $28.52 a share. Boeing, also a Dow stock, sank $1.38 to $79.91.

On Tuesday, the blue-chip index dropped 370 points, or 2.9 percent, and on Monday it lost 108 points. Because it rallied so strongly last week, it remains above the 15-month trading low it sank to in late January.

Broader stock indicators also gave up gains Wednesday. The Standard & Poor’s 500 index fell 10.19 to 1,326.45, and the Nasdaq composite index fell 30.82 to 2,278.75.

Government-bond prices remained lower on the stronger-than-anticipated economic data. The yield on the 10-year Treasury note, which moves opposite its price, rose to 3.60 percent from 3.56 percent late Tuesday.

Stocks have been extremely volatile lately, given the uncertainty in the market about whether a recession is here, how long it might last, how deep it might be and how it might affect corporate profits.

“You’ll find pockets of differentiation in the economy, but the overarching theme is that things are slowing down,” said John O’Donoghue, co-head of equities at Cowen & Co.

Although the economic slowdown is a big concern, “we must not lose sight of the other part of the Fed’s dual mandate — which is price stability,” Federal Reserve Bank of Philadelphia President Charles Plosser said, according to Dow Jones Newswires. The economy has been weakening but costs remain high, leading some economists to think that the U.S. is headed for a troubling predicament known as stagflation.

Plosser’s comments were not surprising, particularly since he is known for being more likely to argue against a rate cut than other Fed members.

Nonetheless, the speech — along with a dismal sales report from Macy’s — sapped some of Wall Street’s relief Wednesday over better-than-expected fourth-quarter productivity and labor-cost data and profit results from The Walt Disney Co.