Investors worried about a jump in consumer inflation that may reduce the possibility of further interest rate cuts. The Dow dropped 70 points to 13,447 while Nasdaq lost 12 points to 2655.
On the upside
BioMarin Pharmaceutical (Nasdaq: BMRN) raised the expected price of a newly-approved drug to treat a genetic disorder for people unable to metabolize certain proteins.
Shares of Rigel Pharmaceuticals (Nasdaq: RIGL) continued to rally after the drug company announced positive results for its experimental rheumatoid arthritis drug that surprised analysts.
Analysts upgraded Microsoft (Nasdaq: MSFT) due to strong IT spending through the rest of the year.
On the downside
Citigroup (NYSE: C) planned to retake control of seven troubled so-called SIVs or structured investment vehicles and add the $49 billion portfolio to its balance sheet.
Phase Forward (Nasdaq: PFWD) was downgraded by an analyst. The company provides software solutions for the drug industry.
Outdoor apparel and equipment maker QuickSilver (NYSE: ZQK) lowered its revenue and earnings guidance for 2008. Analysts issued conflicting opinions about the company's prospects.
In the broad market, declining issues outpaced advancers by a margin of more than 3 to 1 on the NYSE and by more than 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks gave up 6 points to 762.