Dow drops 32.5 in
wild trading

NEW YORK -- Stocks swung wildly today, as investors reacted to conflicting news on the state of inflation in the economy. The Dow fell 32.52 to close at 7,928.32.

In the first hour of trading, the blue-chip index charged higher by 80 points and plummetted to down 70 points, then bounced between negative and positive territory for the rest of the session.

Decliners led advancers by 1,483 to 1,363 on the New York Stock Exchange, with 554 unchanged. NYSE volume was 587.21 million shares vs. 498.9 million yesterday.

Broad-market indexes ended mostly positive. The Standard & Poor's 500 list fell 4.51 to 922.02; the NYSE index fell 2.34 to 478.42; and the Nasdaq index rose 6.87 to 1,583.11. But the American Stock Exchange composite index fell 2.17 to 641.06.

Bonds were equally volatile in the morning but settled down in the afternoon. The 30-year Treasury bond was up 1/2 point and yielding 6.63 percent, down from 6.67 percent late yesterday. Bonds shot up more than a point this morning, slipped into negative territory and then climbed back, taking stocks with them.

Causing the dramatic swings were two separate government reports. The Labor Department said that prices paid to factories and to other producers inched down by 0.1 percentage point in July for the seventh straight month.

That's good news because it shows inflation is under control.

But the Commerce Department reported that retail sales rose 0.6 percent in July, the second consecutive increase and a sign of inflationary pressure.