Stocks Close the Week Lower

Updated from 3:17 p.m. EDT

Stocks in the U.S. closed out the week with losses Friday following a government report showing inflation at the consumer level was higher than expected last month and comments from the chairman of the Federal Deposit Insurance Corp. that indicated management changes at financial firms may be coming.

After opening in positive territory, the Dow Jones Industrial Average retreated and closed lower by 62.68 points, or 0.8%, at 8268.64. The S&P 500 gave back 10.19 points, or 1.1%, to finish at 882.88. The Nasdaq Composite also relinquished early gains and ultimately gave back 9.07 points, or 0.5%, to 1680.14.

The economic docket was in focus following the release of the consumer price index. The headline CPI number was unchanged in April, in line with expectations. However, the core number, which excludes food and energy, rose 0.3%, well above the consensus target of 0.1% and the biggest increase since July of last year.

Ian Shepherdson, chief economist with High Frequency Economics, said that while the core CPI figure was hotter than many economists expected, it doesn't change his mind that inflation will be tame over the near term.

"In short, this does not change our view that the pressure on core CPI is downwards and will remain so for the foreseeable future, though the markets likely will disagree for now," he said in an email.

Meanwhile, the University of Michigan said its consumer sentiment index rose to a preliminary reading of 67.9 in May from 65.1, the highest reading since September last year.