With the market already alarmed at the prospect of an interest rate hike next month, the government's report of a higher-than-expected increase in wholesale prices raised concerns that the Federal Reserve might raise interest rates by more than the quarter percentage point Wall Street has expected.

A late-morning rally showed signs of life for stocks, but pessimistic investors quickly took advantage of the short-lived rise to lock in what gains they could.

"We had a really nice rally yesterday, but technically, the market doesn't look all that great," said Todd Leone, managing director of equity trading at SG Cowen Securities. "I think we'll be in a lower range for a while. We might see a rally when the Fed finally raises rates, actually."

A drop in retail sales in April, as reported by the Commerce Department, was no help to the markets, although it showed a weakening of consumer demand. Sales fell 0.5 percent, bogged down by lagging auto sales. Analysts had expected a modest 0.1 percent rise in sales.

In addition, new applications for unemployment benefits rose last week by 13,000 to 331,000, according to the Labor Department. The increase, while larger than expected, still suggested the job picture is improving, which has been a key factor in the Fed's interest-rate deliberations.

"All that data added up to a mixed bag," said Bryan Piskorowski, market analyst at Wachovia Securities.

Until the Fed meeting in June, the overall unpredictability will turn into anxiety, and many analysts believe the selling might not be over. On the other hand, there's an opportunity to buy stocks at good prices for the brave.