Upbeat News Can’t Prevent Stock Pullback

Jittery investors ignored a drumbeat of generally favorable economic news this week, dealing financial markets their worst blow in nearly six years.

Fearing that the stock market had gone too high too fast, shareholders sent the Dow Jones industrial average into a steep dive.

In economic reports this week:

The Labor Department’s Consumer Price Index rose a modest 0.2 percent in July, slightly more than the 0.1 percent recorded during the previous four months and the biggest advance since a 0.3 percent gain in February.

The Federal Reserve reported that the increase in industrial production slowed to a 0.2 percent rate in July after rising 0.3 percent a month earlier.

The Labor Department said that new claims for unemployment insurance rose by 12,000 last week to a seasonally adjusted 316,000, highest in four weeks but in a range that analysts say is consistent with a tight labor market.

U.S. retail sales rose modestly for the second month in a row, edging up 0.6 percent, the Commerce Department said Wednesday. July sales totaled a seasonally adjusted $212.1 billion, a slight dip from the 0.7 percent rise in June, which was also $4 billion more than originally thought.

The Labor Department said wholesale prices for items from cars to computers fell 0.1 percent in July.