Stocks fell modestly yesterday as investors bristled at a disappointing profit report from Intel and signs of heavy consumer demand that could spur inflation. The Dow Jones industrial average fell 38 points to 8,058, a partial recovery from an early 61-point drop.

Broader stock measures also slipped as interest rates rose in the bond market after a stronger-than-expected reading on September's retail sales fuelled fears the Federal Reserve may slow the economy to protect against inflation.

Declining issues outnumbered advancers by a 7-to-5 margin on the New York Stock Exchange, with 1,203 up, 1,672 down and 553 unchanged.

The Standard and Poor's 500stock list fell 4.55 to 965.73, the NYSE composite index fell 1.68 to 506.89, and the Nasdaq composite index fell 9.73 to 1,723.06

The Russell 2000 index of smaller companies fell 1.23 to 462.74, the second straight drop for that high-flying measure.