Updated from 4:08 p.m. EDTStocks closed basically flat Wednesday in an up-down session, as investors struggled to digest positive earnings news and surprisingly high consumer price data, which ratcheted up concern that the Fed may raise interest rates to fend off inflation. The Dow lost 3.33 points to finish at 10,377.95; the S&P 500 shed 1.27 points, or 0.11%, at 1128.17; and the Nasdaq was down 5.23, or 0.26%, to 2024.85. The 10-year Treasury note, which sold off Tuesday after a strong retail sales report that ignited rate-hike fears, was down 3/32 in price to yield 4.36%, while the dollar gained vs. the euro and yen. Volume on the New York Stock Exchange exceeded 1.5 billion shares, and decliners outnumbered advancers by about 7 to 2. On the Nasdaq, over 1.8 billion shares changed hands, and decliners outpaced advancers by about 3 to 2. After posting modest gains, the Nasdaq briefly pushed as low as 2 points below its 50-day moving average of 2016.37, which represents a technical point of resistance for the index. The S&P went below its 50-day moving average on Tuesday and continued lower Wednesday. "This little sell-off in the last few hours of the day shows that investor psychology may have changed a bit, and that's probably due to the fact that interest rates have now broken a five-year downtrend and now appear to be rising," said Michael Sheldon, chief market strategist at Spencer Clarke. "People are quick to pull the trigger on profits rather than wait for the market to rally further." "The next few weeks are likely to be unsettled with strong earnings and economic news on one hand being offset by rising rates and the risk of inflation down the road," Sheldon added. The government said consumer prices rose 0.5% in March, topping the consensus forecast for a 0.3% increase. Prices in February rose 0.3%. Excluding food and energy costs, prices rose 0.4%, twice that of the consensus forecast and the biggest one-month increase since 2001. The so-called core rate rose 0.2% in February. "The debate the Fed has been having for the last few months is whether they should raise rates pre-emptively and then raise them slowly, or should they hold off and then raise them more quickly after inflation showed up," said Trip Jones, managing director at Sungard Institutional Brokerage. "Now, we could see them raise rates sooner and faster, and that's a drag on stocks. That's what the market is focusing on here." After the inflation data were released, Standard and Poor's changed its outlook on the likelihood of the Fed instituting a rate hike. After saying on Tuesday that the central bank was unlikely to change its position before the presidential elections in November, Sam Stovall, the company's senior investment strategist, said he now thinks that the federal funds rate is likely to be raised 25 basis points in June. Paul Mendelsohn, chief investment strategist at Windham Financial Services, said that the four main pillars supporting the year-long bull market were accommodative monetary policy in the form of low interest rates, stimulative fiscal policy in the form of tax cuts, a weaker dollar and a lack of inflation. Now, he said, those factors seem to be disappearing all at once. "That, coupled with the geopolitical events taking place that potentially threaten George Bush's presidency, could be a problem in terms of the market looking forward," Mendelsohn said. "Even though earnings are coming in okay, the market is going to have to deal with this fear." "If you look at earnings growth and GDP growth in the third and fourth quarters, and you find that this is the best we can do and the best is behind us, you're left wondering what it's going to look like going forward" he added. "That's really the unknown that investors are grappling with in the last couple of days." Safe-haven positions are getting plastered for the second straight session with precious metals leading the freefall. Gold futures shed 1.6% while silver lost 5.5%. The healthcare sector showed strength as investors positioned for a higher interest rate environment. The AMEX Pharmaceutical Index gained 1.1% on the day.