Wall Street has gotten a new case of inflation jitters, with oil prices back on the rise and the Federal Reserve sounding more hawkish on interest rates.

The stock market also faces a new test of momentum with some analysts saying a "correction" is likely after seven months of hefty gains.

In the coming week, investors will pay close attention to oil prices and other inflation indicators, and get more guidance on interest rates from a key congressional appearance from Federal Reserve chief Ben Bernanke.

The blue-chip Dow Jones Industrial Average shed 0.57 percent for the week ended Friday closing at 12,580.83, despite setting a fresh intraday high at midweek.

The broad-market Standard and Poor's 500 index dropped 0.71 percent to 1,438.06 and the tech-heavy Nasdaq composite index declined 0.65 percent to 2,459.82.

Although the markets churned in a trading range over the past week, analysts said stocks are overdue for a correction -- a drop that takes some speculative fervor out of the market -- after a steady uptrend.

"The remarkably resilient uptrend that began July 15 is on schedule to complete its seventh month without a meaningful correction," said Larry Wachtel, chief market analyst at Wachovia Securities.

"While this is all well and good and notably impressive, the laws of gravity seem to be taking hold and the upside road seems to be much more labored ... we still find an affinity for stocks but with an increasingly cautious overtone."

"The market is starting to feel tired," said Marc Pado, market strategist at Cantor Fitzgerald.

Pado said that February "is the worst performing month on average over the last 50 years," which suggests a correction may be imminent.

Meanwhile, the market is grappling with renewed concerns about inflation, with crude oil futures flirting with 60 dollars a barrel, just weeks after dropping to the 50-dollar level.

At the same time, central bank officials are sounding increasingly hawkish, prompting market watchers to scale back expectations for a rate cut and consider the possibility of a rate hike sometime this year.

On Friday, St. Louis Fed president William Poole said that a core inflation rate remaining about two percent "would be unacceptable to me." On the same day, Dallas Fed chief Richard Fisher added, "I wouldn't rule out further increases in the federal funds rate if inflationary winds gain the upper hand."

The increased jawboning on inflation highlights the importance of Bernanke's appearance before Congress on Wednesday for the Fed's semiannual monetary policy report.

But Avery Shenfeld, economist at CIBC World Markets, said he does not see the Fed talk being turned into action anytime soon.

Bernanke "will mirror other Fed speakers, keeping the threat of rate hikes alive, one we don't expect the Fed to act on given decelerating inflation," Shenfeld said.

The economist said the markets may pay closer attention to economic data including retail sales, housing starts and the producer price index to get a better handle on inflation and growth trends.

"The growth data will support the hawkish tilt," he said. "Retail sales will look reasonably healthy, particularly once one strips out a dip in auto sales. But watch for energy and food costs to slow real consumption over the balance of the quarter. Housing starts are headed lower, but perhaps not this month."

Michael Malone, analyst at Cowen and Co., said the final leg of corporate earnings season may lend support to the market.

"Earnings will continue to be in focus. On the margin it has been a healthy earning season," he said.

"The S and P is having a hard time getting above 1,450. It is a level of technical resistance at the moment. I think the backdrop remains positive, and we remain very much in a bull trend. Once we get above that 1,450 level, the market will move higher, but I just can't say when it's going to be."

The bond market gained amid the weekly drop in equities.

The yield on the 10-year Treasury bond fell to 4.784 percent from 4.827 percent a week earlier while that on the 30-year Treasury bond eased to 4.865 percent from 4.926 percent. Bond yields and prices move in opposite directions.