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US shares fall as inflation picks up

Do Not UseDo Not Use 17/05/2016

(Close): Wall Street stocks closed lower after a pick-up in US consumer prices raises the prospect of a rise in interest rates.

The Consumer Price Index rose by 0.4% in April, the biggest increase since February 2013. Annual inflation accelerated to 1.1% from 0.9% in March.

The Dow Jones fell 180 points to 17,529.98.

The Nasdaq index slid 59.73 points to 4,715.73, while the S&P 500 closed down 19.45 at 2,047.21.

In addition to the inflation data, separate figures showed that US manufacturing output rose by 0.3% last month.

The wider measure of industrial output increased by a better-than-expected 0.7%, mainly due to a rebound in output from the utilities sector.

Meanwhile. figures from the Commerce Department found housing starts rose by 6.6% in April to a seasonally adjusted annual pace of 1.17 million units.

Among individual stocks, Home Depot shares fell 2.5% to $132.85 despite the home improvement chain reporting a better-than-expected first quarter.

Net income rose 14% to $1.80bn with net sales up 9% to $22.76bn. Home Depot also raised its forecasts for full-year sales and profit growth.

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