STOCKS edged lower with bonds yesterday after another Federal Reserve official aggravated, worries the central bank will raise interest rates next week to fight inflationary pressures.

The Dow Jones bobbed above 7,300 for the first time, but ended the day with an 18-point loss.

Most broad measures also retreated after struggling to extend Monday's rally, which boosted the Dow by 123 points to a record high.

Investors are now awaiting today's and tomorrow's reports on wholesale and retail prices, the final clues on inflation before next Tuesday's Fed policy meeting.

Declining issues outnumbered advancers by an eight-to-seven margin on the New York Stock Exchange, with 1,164 up, 1,336 down and 872 unchanged.

NYSE volume totalled 489.72 million shares.

The Nasdaq composite index fell 10.60 at 1,333.59, but the American Stock Exchange composite index rose 1.13 to 579.60.