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Stocks decline as oil prices rebound
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    NEW YORK — Wall Street fell sharply Wednesday as oil prices rebounded, aggravating concerns that inflation may lead the world’s central banks to raise interest rates. The Dow Jones industrial average fell more than 150 points.
    Investors have been uneasy about oil prices, which at times surged above $136 a barrel on the New York Mercantile Exchange after dropping a day earlier. Having breached $139 a barrel last week, record-high crude has increasingly posed both an inflationary risk and a threat to growth.
    Energy Department data Wednesday showed that gasoline supplies grew last week but that crude oil inventories fell more than analysts expected. The weekly report suggested no let-up in U.S. energy demand, even as consumers adjust their budgets to accommodate $4-a-gallon gasoline.
    Other data Wednesday that could tell investors how Americans are faring financially could come from the Federal Reserve’s Beige Book, which provides readings on the U.S. economy by region and arrives two weeks before the Fed’s next meeting.
    ‘‘There are not a lot of positive things you can point to right now,’’ said Michael Binger, portfolio manager at Thrivent Investment Management in Minneapolis. ‘‘We have commodity prices higher, inflation up, the prospect of the Fed raising interest rates instead of lowering, a worldwide slowdown and an economic slowdown in the U.S.’’
    In early afternoon trading, the Dow Jones industrial average fell 151.68, or 1.23 percent, to 12,138.08.
    The biggest loser among the 30 Dow components was Alcoa Inc., which fell $2.39, or 5.6 percent, to $40.33 after a JPMorgan analyst said the aluminum producer is not planning to sell itself or spin off part of its business.
    Broader stock indicators also declined. The Standard & Poor’s 500 index fell 14.63, or 1.08 percent, to 1,343.81, and the Nasdaq composite index fell 37.13, or 1.52 percent, to 2,411.81.
    The stock market finished mostly lower on Tuesday on jitters about inflation.
    Bond prices rose Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.09 percent from 4.11 percent late Tuesday.
    The dollar slipped against other major currencies, while gold prices rose.
    Light, sweet crude increased $4.24 to $135.55 a barrel on the Nymex.
    Investors are worried that the spike in oil prices will dent consumer spending, which accounts for more than two-thirds of U.S. economic activity and is crucial to some investors’ hopes of seeing the U.S. economy rebound from a slowdown in the second half of the year. However, the prospect of a sustained elevation of prices in oil and other commodities has dimmed some of those hopes.
    Binger noted that one week spot since last fall on Wall Street — the financial sector — is now faced with a new worry of higher interest rates while still trying to navigate a tight credit market and fallout from bad bets on now-souring home loans.
    ‘‘If the Fed starts to raise rates because of inflation not because the economy is good, that is not a positive on the financial stocks,’’ he said.
    In a speech Wednesday, Federal Reserve Vice Chairman Donald Kohn said investors shouldn’t react too quickly to rising oil prices. He said in prepared remarks that policymakers need to take actions that balance the Fed’s goals with short-term effects on unemployment and inflation.
    In corporate news, Corporate Express NV, the Dutch office supplies distributor, accepted a sweetened $2.7 billion buyout bid from U.S. office supplies retailer Staples Inc. Staples rose $1.04, or 4.5 percent, to $24.19.
    The Russell 2000 index fell 8.87, or 1.21 percent, to 723.75.
    Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 692.1 million shares.
    Overseas, Japan’s Nikkei 225 average closed 1.16 percent higher. Britain’s FTSE 100 index closed down 1.78 percent, Germany’s DAX 30 index lost 1.78 percent, and the French CAC-40 index fell 2.10 percent.

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