* Core CPI data points to firming inflation trends
* Crude falls 4 pct; energy, materials lead losses
* Applied Materials jumps on outlook, props Nasdaq
* Dow down 0.41 pct, S&P down 0.30 pct, Nasdaq up 0.08 pct (Adds details, comment, updates prices)
By Abhiram Nandakumar
Feb 19 (Reuters) - The Dow and S&P 500 slipped on Friday morning as a renewed slide in oil prices weighed on energy and materials stocks and prospects of a rate hike this year were rekindled by data pointing to firmer inflation trends.
The Nasdaq was little changed as Facebook, up 1 percent, and Applied Materials, up 8.5 percent, helped limit losses.
Eight of the 10 major S&P sectors were lower. The energy sector fell 2.05 percent and the materials sector dropped 1 percent.
Crude prices, which have moved in lockstep with the stock market for much of the year, slid more than 4 percent after a record increase in U.S. stockpiles.
A report showed core consumer price index rose by a bigger-than-expected 0.3 percent in January, signs of an uptick in price pressures that could allow the Federal Reserve to gradually raise interest rates this year.
“The pick-up in core CPI inflation to a three-and-a-half-year high ... illustrates that rising domestic price pressures won’t allow the Fed to leave interest rates at near-zero levels for that much longer,” said Steve Murphy, U.S. economist at Capital Economics in a note.
While traders are not expecting any increases at this year at all, Fed policymakers appear to be at odds.
Cleveland Fed President Loretta Mester said on Friday rates will likely need to remain accommodative for some time, while other officials maintain that weak inflation and global turbulence are enough to pause on further hikes.
“(The market) likes its morphine drop of really cheap rates. That’s just that. It’s an easy environment to work in,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
At 10:56 a.m. ET (1556 GMT), the Dow Jones industrial average was down 67.17 points, or 0.41 percent, at 16,346.26.
The S&P 500 was down 5.83 points, or 0.3 percent, at 1,912.
The Nasdaq Composite index was up 3.48 points, or 0.08 percent, at 4,491.02.
Losses on the index were limited by Applied Materials, whose shares jumped on the chip equipment provider’s buoyant forecast.
Consumer discretionary stocks, especially retailers, came under pressure after weak results from department store operator Nordstrom and sports apparel maker VF Corp.
The reports follow disappointing holiday-quarter results from Wal-Mart on Thursday, which, along with falling oil prices, snapped a three-day rally on Wall Street.
Nordstrom dropped 8.5 percent to $48.27 and VF Corp was down 4.1 percent at $58.73.
Declining issues outnumbered advancing ones on the NYSE by 1,875 to 996. On the Nasdaq, 1,324 issues rose and 1,180 fell.
The S&P 500 index showed six new 52-week highs and three new lows, while the Nasdaq recorded 14 new highs and 37 lows. (Reporting by Yashaswini Swamynathan and Abhiram Nandakumar in Bengaluru; Editing by Savio D‘Souza)