* Fed’s Bullard: Much closer to normal economy than most realize
* U.S.-listed shares of Barclays fall on fraud lawsuit
* GoPro to make Nasdaq debut after pricing IPO at top of range
* Indexes down: Dow 0.5 pct; S&P 0.5 pct; Nasdaq 0.4 pct (Adds Bullard comments, updates prices)
By Angela Moon
NEW YORK, June 26 (Reuters) - U.S. stocks fell on Thursday following comments from a top Federal Reserve official that interest rate increases should come sooner rather than later.
St. Louis Fed President James Bullard said the U.S. jobless rate will fall below 6 percent and inflation looks likely to rise back to 2 percent later this year, putting the economy closer to normal than most realize. Bullard is non-voting member of the FOMC.
“You are basically going to be near normal on both dimensions basically later this year,” Bullard said in an interview with Fox Business Network. “That’s shocking, and I don’t think markets, and I‘m not sure policymakers, have really digested that that’s where we are.”
Bullard reiterated his belief that raising rates by the end of the first quarter of 2015 will be appropriate.
Financial stocks were among the day’s top decliners after New York State’s attorney general filed a securities fraud lawsuit against Barclays, accusing the British bank of giving an unfair edge in the United States to high-frequency trading clients.
U.S.-listed shares of Barclays fell 7.3 percent to $14.57. Other European banks were also hit, with U.S.-listed shares of UBS AG down 2.5 percent to $18.45 and Credit Suisse off 4.1 percent at $28.14.
Alcoa Inc shares rose 3.1 percent to $15.01. The company agreed to buy aircraft parts maker Firth Rixson from private equity firm Oak Hill Capital Partners for $2.85 billion in cash and stock.
The Dow Jones industrial average fell 85.28 points or 0.51 percent, to 16,782.23, the S&P 500 lost 9.52 points or 0.49 percent, to 1,950.01 and the Nasdaq Composite dropped 19.10 points or 0.44 percent, to 4,360.66.
Market reaction was muted to economic reports that showed weekly jobless claims fell marginally last week while U.S. consumer spending rose less than expected in May.
Shares of the wearable sports camera maker GoPro will debut on the Nasdaq after 17.8 million class A shares priced at $24 per share, the top end of the expected price range. The IPO raised about $427.2 million. (Reporting by Angela Moon; Editing by Chizu Nomiyama and Nick Zieminski)