Hints of inflation, but experts aren't worried

WASHINGTON (AP) _ The economy flashed a warning sign of inflation Tuesday, but the recovery is so fragile that experts say a doomsday scenario of runaway prices and higher interest rates is a long way off, if it happens at all.

While the Federal Reserve is all but certain to take up the prospect of inflation at its meeting this week, no one expects policymakers to raise interest rates anytime soon to fight the threat. Rates are at record lows to nudge the recovery along.

Even if the Fed did decide to raise rates later, there would be risks: Borrowing money would be more expensive, squeezing corporate profits, and stock prices could fall _ all of it threatening to derail the recovery.

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Spike in wholesale inflation sends stocks lower

NEW YORK (AP) _ The stock market fell for the first time in five days and Treasurys slipped after a jump in inflation stoked concerns that the Federal Reserve would be forced to raise interest rates.

Stocks extended their slide late Tuesday after General Electric Co. forecast that revenue and earnings would be largely flat in 2010. Major stocks indexes fell 0.5 percent from 14-month highs, including the Dow Jones industrial average, which lost 49 points to 10,452.00.

Trading was subdued as Fed policymakers gathered for a two-day meeting on interest rates. The Fed isn't expected to raise rates from their record low level, but the day's economic reports brought reminders that the central bank could be forced to raise rates sooner than expected to keep inflation at bay.

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Best Buy 3Q profit up, but co sees slimmer margins

NEW YORK (AP) _ Customers snapping up electronics and gift cards for the holidays boosted Best Buy's third-quarter profit, but the nation's largest electronics retailer said Tuesday that shoppers are focused on prices, particularly of TVs and computers.

Best Buy predicted consumers will stay that way in the fourth quarter, squeezing its profit margin. Still, Best Buy Inc. raised its annual profit and revenue forecasts and said both traffic and shoppers' average spending rose from a year ago.

Sales at Best Buy stores that have been open at least one year _ a key retail measure _ rose more than 10 percent Thanksgiving weekend, CEO Brian Dunn said in a conference call with analysts. Half the gain came from higher traffic and half from customers spending more.

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Judge tosses case against 2 former Broadcom execs