U.S. stocks surrendered all the day’s gains and tumbled in the final hour of trading, giving the Nasdaq Composite Index its longest losing streak since 1994, on continuing concern that the Federal Reserve will keep raising interest rates.

“You’ve had a real concern about whether or not the Fed is done and more and more of a feeling that they’re not,” said Laszlo Birinyi, who oversees $300 million as president of Birinyi Associates Incorporated in Westport, Conn.

Stocks erased initial gains sparked by earnings at retailers Sears Holdings Corporation and Limited Brands Incorporated that exceeded analyst estimates.They slumped after a private report hinted at an economic slowdown and a Fed official said a rise in consumer prices makes the central bank less likely to pause.

Countrywide Financial Corporation, the biggest American mortgage lender, and Caterpillar Incorporated, the largest maker of earthmoving equipment, led the retreat as investors shunned companies most affected by the rate outlook.

The Nasdaq fell 15.48, or 0.7%, to 2180.32, for an eighth straight decline. The Standard & Poor’s 500 Index lost 8.51, or 0.7%, to 1261.81, a three-month low. The Dow Jones Industrial Average fell 77.32, or 0.7%, to 11,128.29, an encore to a 200-point drop a day ago.

The S&P 500 has fallen 4.8% since the Fed on May 10 lifted the benchmark lending rate for a 16th straight time, the biggest drop over any seven trading days since March 2003.

Consumer prices increased more than economists expected last month, the government said yesterday, triggering the biggest single-day drop in stocks since January.

Richmond Fed President Jeffrey Lacker said in comments to reporters in Norfolk, Virginia that “the inflation outlook is at the borderline of acceptable and perhaps moving beyond.”

“What we’re hearing from the Fed reinforces that they’re taking a very strong look” at inflation, the chief investment officer at Philadelphia Trust Company with $1.4 billion, Richard Sichel, said. “There is more of that fear now that they might carry it too far.”

A jump in oil prices contributed to the late-day selloff. Crude for June delivery climbed 1.15 to $69.45 a barrel.

Eight stocks fell for every three that rose on the New York Stock Exchange. Some 1.81 billion shares changed hands on the Big Board, 11% more than the three-month average.

“One scenario got more real to people, in that maybe we could have inflation and a slowdown in the economy, and that wouldn’t be good,” said Wayne Reisner, who helps manage $1.6 billion at Carret Asset Management LLC in New York. “You could have a script where all of a sudden the outlook for earnings is less robust.”