NEW YORK (AP) – Stocks fell moderately in early trading Friday as climbing oil prices again weighed on investors’ already rickety sentiment and a potentially costly patent ruling against Microsoft Corp. hurt technology shares.

The pullback Friday followed several mixed sessions in which the tech-dominated Nasdaq composite index showed slight increases but blue chip stocks have pulled back in part amid inflation concerns.

Investors looking for direction in the final trading day of a holiday-shortened week will likely keep tabs on speeches from Dallas Fed President Richard Fisher and San Francisco Fed President Janet Yellen scheduled for Friday.

The speeches come as inflation concerns have infiltrated Wall Street’s sentiment to a greater degree than in recent weeks. A reading on inflation at the consumer level earlier in the week showed inflation was higher than expected, and a pronounced increase in oil prices could also increase costs for businesses and consumers.

Only last week, stocks showed their best performance of the year after Fed President Ben Bernanke testified before congressional committees that inflation was likely to moderate over two years.

In the first hour of trading, the Dow Jones industrial average was down 32.05, or 0.25 percent, at 12,653.97.

Broader stock indicators were lower. The Standard & Poor’s 500 index was down 2.59, or 0.18 percent, at 1,453.79, and the Nasdaq was down 6.74, or 0.27 percent, at 2,518.20.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.70 percent from 4.73 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose 34 cents to $61.29 on the New York Mercantile Exchange.

In corporate news, Microsoft slipped 25 cents to $29.14 after a San Diego jury ruled that the software maker would have to pay $1.52 billion to Alcatel-Lucent SA in a patent-infringement case.

Taco Bell parent Yum Brands Inc. fell 80 cents to $60.26 after several news outlets showed video of rats scurrying about a New York City Taco Bell.

Tekelec, a maker of telecommunications signaling devices, fell 99 cents, or 6.6 percent to $13.91 after the company’s 2007 forecast was met with disappointment on Wall Street.

The Russell 2000 index of smaller companies was down 2.97, or 0.36 percent, at 826.47.

Overseas, Japan’s Nikkei stock average rose 0.44 percent. In afternoon trading, Britain’s FTSE 100 was up 0.22 percent, Germany’s DAX index was up 0.18 percent, and France’s CAC-40 was up 0.14 percent.
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