By TIM PARADIS -- AP Business Writer
Stocks fell for the second straight day Thursday after warnings from several homebuilders raised investors' concerns about an economic slowdown and comments about inflation from San Francisco Federal Reserve President Janet Yellen offered investors little comfort.
Wall Street has been trying to anticipate whether the Fed will keep interest rates stable -- or resume its rate hikes to keep inflation in check -- when it meets later this month.
Investors, already armed with recent economic data pointing to a housing slowdown, were forced to digest sour anecdotal evidence as well. Beazer Homes USA Inc., Hovnanian Enterprises Inc. and KB Home warned that the home-building sector is facing difficulties including cancellations and spikes in inventories.
The bad news only worsened Thursday afternoon when news services quoted Yellen as saying the Fed should maintain its focus on containing inflation. She said the outlook regarding inflation remains "highly uncertain."
Yellen also said data suggest both the housing market and the overall economy are cooling; the question for investors is how quickly is that occurring.
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