US stocks slump on inflation worries; Dow falls over 350 points

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Wall Street stocks were off to a gloomy start on Friday, dragged down by concerns that inflation could prove stickier than expected, leading to a longer period of high interest rates.

The Federal Reserve's preferred inflation gauge, the personal consumption expenditures (PCE) price index, picked up in January as costs for goods and services both rose.

The index jumped 5.4 percent from a year ago, and 0.6 percent between December and January, Commerce Department data showed.

The Dow Jones Industrial Average slipped 1.0 percent to 32,817.18 minutes after markets opened, while investors await further data on new home sales.

The broad-based S&P 500 Index dropped by 1.2 percent to 3,964.22, while the tech-heavy Nasdaq Composite Index plunged 1.5 percent to 11,413.70.

"The key takeaway... is the recognition that there isn't disinflation in this report," said Patrick O'Hare of Briefing.com of the PCE numbers.

He added that the figures are "piquing concerns about inflation remaining sticky" for a longer time, prompting the Fed to hold interest rates at a higher level over an extended period to combat price increases.

Among individual companies, Boeing plummeted more than seven percent after regulators' announcement Thursday that the aviation giant suspended deliveries of the 787 Dreamliner again following new issues with a fuselage component.

But Boeing said it does not expect a shift to its production and delivery outlook for the year.