U.S. stocks fell on Friday after a government report showed consumer prices rose the most in more than 2 years, raising concerns over inflation.

The consumer price index rose 0.8 percent last month, the most since September 2005, according to the Labor Department. Excluding volatile food and fuel prices, the index rose 0.3 percent, higher than forecasts.

Yesterday, wholesale prices also posted higher than expected results. The recent results reduce the possibility that the Federal Reserve will deem it necessary to lower interest rates to give the economy a boost.

The Dow Jones industrial average .DJI fell 134.94 points, or 1 percent, to 13,383.02 at 3:39 p.m. The Standard & Poor's 500 Index .SPX was down 14,02 points, or 0.93 percent to percent to 1,474.39. The Nasdaq Composite Index was down 24.80 points, or 0.93 percent, at 2,643.69.

The outlook had been brighter earlier in the day after Goldman Sachs boosted its outlook for Citigroup's debt. Financial sector share rose as Goldman lifted Citigroup's debt rating to outperform from in line. Citgroup shares rose as much as 3.4 percent but were down $0.08, or 0.26 percent to $30.93 at 3:26 p.m.