Renewed worries about inflation and the Persian Gulf squeezed the financial markets Thursday, pushing stocks, bonds and the dollar lower. Gold and oil prices rose. The Dow Jones average of 30 industrial stocks fell 66.83 to 2,681.44, its lowest close since the Mideast crisis began. Stocks declining in price outnumbered advancing ones by about 4 to 1 in nationwide trading of New York Stock Exchange-listed stocks. Analysts blamed a worse-than-expected government report on inflation and disappointing news about the Iraq-U.S. standoff. The Dow index dropped about 20 points after the Labor Department reported that consumer prices rose 0.4 percent, higher than the 0.3 percent most economists expected. Meanwhile, Iraqi President Saddam Hussein charged that President Bush has lied to the American people about the Middle East situation, and warned there would be American deaths in the region if the United States continues to intervene. Also, President Bush met with Jordan's King Hussein, but afterward the king said he had not made up his mind about complying with a United Nations embargo of Iraq. In addition, the king said he did not carry a letter from the Iraqi leader to Bush, as was previously reported. ``The market was expecting something positive from the meeting,'' said Yuichi Abe, a vice president in the New York office of Nikko Securities Co. International Inc. In the credit markets, interest rates rose and prices fell in nervous trading. The Treasury's key 30-year bond fell 1 23-32 points, or $17.19 per $1,000 in face amount. The bond's yield jumped to 8.92 percent from 8.76 percent late Wednesday. It was the highest yield since it flirted with 9 percent in early May. ``What you're looking at here are straight worries about inflation,'' said Lincoln Anderson, an economist for Bear Stearns & Co., a Wall Street investment firm. ``The CPI report was not a good one.'' Bond investors generally sell on bad inflation news because higher prices erode the value of fixed-income investments. In the oil market, the September contract for U.S. crude closed up 90 cents at $27.36 per barrel on the New York Mercantile Exchange, mostly on disappointment over King Hussein's mission. Crude oil's recent rise had stalled earlier in the week on news that King Hussein would meet with Bush and initiate a peaceful solution to the Gulf situation. The dollar, which seems to have lost some of its allure as a safe haven, tumbled to an all-time low against the German mark during U.S. trading. The dollar was quoted at 1.5525 marks in late New York trading, down from 1.566 marks late Wednesday and from 1.5645 marks Tuesday, the previous low in the modern mark's 42-year history. Gold prices moved in the other direction, rising $6.60 an ounce to $409.20 on the Commodity Exchange in New York.
