US stocks fall after Fed rate rise
28/03/2006 - 22:49:53Stocks tumbled today with the Dow Jones industrials dropping 95 points after the Federal Reserve disappointed investors by suggesting that more interest rate hikes were on the way.
The Fed raised a key interest rate today as expected, but the surprise for the markets came in an accompanying statement in which the Fed upgraded its view on the economy, suggesting that at least one and possibly even two more rate increases were in the cards.
That sent stock prices sharply lower, despite a strong reading on consumer confidence earlier today that had provided support to stock prices.
The Dow Jones industrial average closed down 95.57, or 0.85%, at 11,154.54.
Broader stock indicators also fell. The Standard & Poor’s 500 index fell 8.38, or 0.64%, to 1,293.23 and the Nasdaq composite index fell 11.12, or 0.48%, to 2,304.46.
The yield on the 10-year Treasury note, which rises when the price of the note falls, jumped to 4.78%, up from 4.71% late Monday.
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