Related: U.S. stocks tumble on inflation fear

    NEW YORK, June 6 (Xinhua) -- U.S. stocks extended their falls Tuesday amid fear on further rate hike of inflation, as oil prices fell modestly.

    The market sank sharply Monday after U.S. Federal Reserve (Fed) Chairman Ben Bernanke on Monday called recent increases in inflation unwelcome and pledged to be vigilant against the rising inflation.

    Analysts said that it is a sign that the U.S. Fed will continue to increase the short-term interest rate in the policy-making meeting to be held at the end of this month.

    The U.S. Fed has increased short-term interest rates for 16 times since June 2004 and raised the federal fund rate to 5 percent last month. World crude oil prices fell modestly Tuesday as concerns over Iran eased. New York's main contract, light sweet crude for delivery in July, dipped 10 cents to finish at 72.50 dollars per barrel after falling as low as 71.35 dollars.

    At the closing bell, the Dow Jones Industrial Average dropped 46.58, or 0.42 percent, to 11,002.14. The Standard & Poor's 500 index fell 1.44, or 0.11 percent, to 1,263.85. The Nasdaq composite fell 6.84, or 0.32 percent, to 2,162.78. Enditem