Dow fails to hold gains


US stocks surrendered big gains yesterday, with major indexes ending barely higher as bonds retreated from an early rally spurred by an economic report that briefly counteracted simmering inflation worries.

The blue-chip barometer has slid 228 points over that span, more than halving the year's impressive gain to 3.2 per cent.

Several broad measures dipped into the negative territory as bonds retreated in the afternoon, but finished with a slim gain.

Stocks drew an early boost from the bond market, where interest rates fell sharply after the Labour Department reported that employment costs, which constitute two-thirds of a product's price, rose 0.8 per cent in the fourth quarter, meeting analyst forecasts.

With recent reports consistently exceeding forecasts, investors had been worried the Employment Cost Index would reveal a much sharper advance than had been projected.