Fed chairman speech sparks concern on Wall Street
Wall Street’s interest rate anxiety sent stocks moderately lower today after comments from Federal Reserve Chairman Ben Bernanke compounded investors’ concerns about surging oil prices and a weak US dollar.
The Dow Jones industrial average slid 23.85, or 0.21%, to close at 11,343.29.
Broader stock indicators declined. The Standard & Poor’s 500 index dropped 5.42, or 0.41%, to 1,305.19, and the Nasdaq composite index lost 17.78, or 0.77%, to close at 2,304.79.
Stocks had traded in positive territory for most of the session, lifted by an upbeat sales report from Wal-Mart Stores and a raft of solid economic data on industrial activity, construction and consumer spending.
But the market took a late-day dive following reports that Bernanke said he was worried about media and investor speculation that the Fed had finished raising interest rates in its long-running battle against inflation.
Last Thursday, Bernanke told a congressional panel that the central bank could pause – but not necessarily stop – its string of rate hikes as it keeps a close watch on the economy’s health.
Although the day’s better-than-expected economic numbers gave investors some reassurance that the US economy was expanding at a healthy pace, the bond market fretted about higher interest rates and sent bond yields climbing.
Oil prices also leaped almost US$2 (€1.59) a barrel amid continued tension over Iran’s nuclear arms programme.
