NEW YORK (AP) – Stocks gave up early gains and fell Friday as Wall Street wrestled with inflation data that wasn’t as bad as the market had feared but showed prices continue to rise despite a slowing economy.

Stocks found some minimal support from a stronger-than-expected increase in industrial production.

The Labor Department’s report that its Consumer Price Index rose by 0.4 percent in February renewed some of the concerns that dogged stocks on Thursday. Wall Street had expected an increase of 0.3 percent. However, the important core figure, which excludes often volatile food and energy prices, didn’t surprise Wall Street. It rose 0.2 percent as expected.

The Federal Reserve reported industrial production increased 1 percent in February, well above the 0.3 percent increase analysts expected.

“The market is dealing with the softer economic data that we’re seeing and trying to reconcile that with the somewhat stiff inflation data,” said Marie Schofield, fixed income strategist and portfolio manager at Columbia Management Group.

In midafternoon trading, the Dow Jones industrial average fell 69.14, or 0.57 percent, to 12,090.54.

Broader stock indicators also slipped. The Standard & Poor’s 500 index fell 6.22, or 0.45 percent, to 1,386.06, and the Nasdaq composite index fell 8.33, or 0.35 percent, to 2,370.37.

Declining issues outpaced advancers by about 2 to 1 on the New York Stock Exchange, where volume came to a heavy 1.4 billion shares as options contracts expired. The Big Board set a volume record in its first half hour of trading Friday.

Bonds showed little overall movement as stocks slid. The yield on the benchmark 10-year Treasury note rose to 4.55 percent from 4.54 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell $1.15 to $56.40 per barrel on the New York Mercantile Exchange.

Inflation concerns remained entrenched on Wall Street Friday. The CPI increase was double that of January and the largest rise since a similar increase in December. Rising costs for gasoline, food and citrus crops helped boost prices.

The consumer inflation figures came one day after a key measure of inflation at the wholesale level took Wall Street by surprise with a higher-than-expected reading. Wall Street overcame the unwelcome Producer Price Index reading Thursday to move moderately higher as it focused on further corporate takeover news.

The inflation readings draw Wall Street’s attention because investors are concerned that higher prices will make it harder for the Federal Reserve to justify a reduction in short-term interest rates, even amid a slowing economy. The latest inflation readings carry particular significance as the Fed’s rate-setting committee meets next week.

Investors appeared undeterred by word that a measure of consumer confidence fell to a six-month low in mid-March. The Reuters/University of Michigan consumer sentiment index fell to 88.8 from 91.3 in February. Wall Street had expected a reading of about 90.

The volatility and heavy volume that has returned to Wall Street after months of unusual calm surfaced again Friday with the expiration of stock index futures, stock index options, stock options and single stock futures – a confluence of expirations that Wall Street refers to as quadruple witching. The choppiness wasn’t limited to Friday this week because rule changes have given investors more time during which they can jockey for new positions.

In corporate news, drug developer Hollis-Eden Pharmaceuticals Inc. rose 87 cents, or 35.1 percent, to $3.38 after it reported a narrower fourth-quarter loss when excluding a charge from a year earlier and said it would halt development of a treatment for radiation sickness. The Department of Health and Human Services earlier this month rejected the treatment for use in a national defense program.

Hard-hit subprime mortgage lenders rallied Friday on word that the companies were taking steps to raise capital. Accredited Home Lenders Holding Co. jumped $1.92, or 20 percent, to $11.35 after the subprime mortgage lender announced plans to sell some of its loans at a discount to raise cash necessary to meet margin calls.

Fremont General Corp. rose 74 cents, or 10 percent, to $8.14 after Credit Suisse boosted the company’s credit line to $1 billion. The company said it received several proposals for additional credit.

Wal-Mart Stores Inc., one of the 30 stocks that make up the Dow Jones industrials, is scrapping a plan to set up a bank after months of intense debate with federal regulators and in Congress over whether the world’s largest retailer should be granted the added financial power of a federally insured bank. Wal-Mart rose 14 cents to $46.14 following the Federal Deposit Insurance Corp. announced the company pulled its application for a charter.

Hewlett Packard Co., also a Dow component, rose 22 cents to $39.91 after the company approved an additional $8 billion to repurchase stock.

The Russell 2000 index of smaller companies fell 5.85, or 0.75 percent, to 777.76.

Overseas, Japan’s Nikkei stock average closed down 0.69 percent, Hong Kong’s Hang Seng index fell 0.08 percent and the often volatile Shanghai Composite Index fell 0.72 percent. Britain’s FTSE 100 closed down 0.04 percent, Germany’s DAX index slipped 0.09 percent, and France’s CAC-40 fell 0.14 percent.

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