by Caroline Valetkevitch

NEW YORK (Reuters) – The New York Stock Exchange ended lower on Thursday, weighed down by the decline in the semiconductor sector for a second consecutive session, while the acceleration of producer prices in the United States revived concerns about inflation and the possibility that the Federal Reserve (Fed) will be more patient in lowering interest rates.

The Dow Jones index fell 0.35%, or 137.66 points, to 38,905.66 points.

The broader S&P-500 lost 14.83 points, or 0.29%, to 5,150.48 points.

The Nasdaq Composite fell 49.24 points (0.30%) to 16,128.53 points.

Data released today showed that producer prices in the United States increased more than expected in February, driven by rising fuel and food prices.

A separate report said retail sales rebounded last month, but less than expected.

It is expected that the Fed, which will meet next week, will once again decide to leave its rates unchanged.

Traders are mainly betting on a first rate cut in June, but this hypothesis took a hit with the inflation data, falling to 62.9% against 81.7% a week earlier according to CME FedWatch .

“If we look at inflation as a whole, the data has been quite high over the last couple of months; however the market has continued to move higher,” commented Tony Welch, chief investment officer of SignatureFD.

“Fed policy may not be as accommodative as the market wanted this year, but the prospect of further tightening remains unlikely,” he added.

Particularly sensitive to rates, utilities and real estate recorded the biggest declines of the day among the major sectors of the S&P-500, down 1.6% and 0.8% respectively.

Already in decline the day before, the semiconductor index lost 1.8%, in the wake of Nvidia’s 3.2% decline. The sector is down 3.5% this week as investors favored profit-taking after recent significant gains.

(Written by Jean Terzian)

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