US stocks fall on worries of higher Fed rates
Defending Masters Champion Bubba Watson, left, and 10-Year-Old Drive, Chip & Putt Champion Kelly Xu, of Santa Monica, Calif., visit the trading floor of the New York Stock Exchange on Tuesday, March 24, 2015. Wall Street stocks finished lower Tuesday after positive economic data lifted speculation the US Federal Reserve could move more quickly to raise interest rates. AP PHOTO/RICHARD DREW
NEW YORK–Wall Street stocks finished lower Tuesday after positive economic data lifted speculation the US Federal Reserve could move more quickly to raise interest rates.
The Dow Jones Industrial Average fell 104.90 points (0.58 percent) to 18,011.14.
The broad-based S&P 500 fell 12.92 (0.61 percent) to 2,091.50, while the tech-rich Nasdaq Composite Index dropped 16.25 (0.32 percent) to 4,994.73.
Data showed sales of new single-family homes surged in February to a seven-year high, while consumer prices rose for the first time in four months.
The new economic data make a faster rate hike by the Fed “a little bit more likely,” said Chris Low, chief economist at FTN Financial.
Sam Stovall, chief investment strategist at S&P Capital IQ, said investors have also begun to focus on first-quarter earnings. The energy sector is forecast to report declining earnings and other sectors are also expected to be weak, he said.
“The concern is that valuations are rich right now,” Stovall said.
Despite the drop on the Nasdaq, some prominent technology companies rose. Facebook gained 1.0 percent, Netflix advanced 3.1 percent and Twitter jumped 6.2 percent.
Google rose 2.0 percent on news it hired Morgan Stanley chief financial officer Ruth Porat to serve in the same post at the technology giant.
Morgan Stanley, which promoted Jonathan Pruzan from its investment banking segment as chief financial officer, dipped 0.2 percent.
Whiting Petroleum sank 19.5 percent to $30.91 after it announced it was selling 35 million shares for $30 per share. The shale producer also announced terms for a bond offering to raise $1 billion.
Freeport-McMoRan, a metals and petroleum producer, fell 0.8 percent after slashing its dividend to five cents per share from 31 cents.
Spicemaker McCormick rose 2.6 percent as first-quarter earnings translated into 70 cents per share, six cents above analyst expectations.
Bond prices rose. The yield on the 10-year US Treasury fell to 1.87 percent from 1.91 percent Monday, while the 30-year slid to 2.46 percent from 2.51 percent Monday. Bond prices and yields move inversely.
