- Two men accused of selling meth to undercover cop (6/22/17)
- Cape man stabbed in head, arm after strip-club incident; skull fractured, police say (6/25/17)3
- Police: Man grabbed wheel, tried to kill driver and himself in Jackson crash (6/23/17)
- Jackson scores high in survey of residents; better streets, Aldi are high priorities (6/20/17)4
- Marble Hill mayor hires city manager without board approval (6/21/17)3
- Annual SEMO District Fair event lineup announced (6/23/17)1
- Oran town board fired officer before hiring him as police chief; city officials say they can't remember reason for firing (6/25/17)3
- Two charged in theft of jewelry from Cape storage facility (6/23/17)1
- Playing with fire (6/25/17)
- Judge denies request to revoke sheriff's bond (6/25/17)3
Stocks fall on tech downgrades, possible interest rate increase
AP Business WriterNEW YORK (AP) -- A weaker outlook for Intel and the possibility of higher interest rates prompted investors to collect profits Wednesday, pushing stocks sharply lower across market sectors.
Wall Street's losses widened throughout the session with the Dow industrials falling more than 135 points and the Nasdaq composite index falling to its lowest close in three weeks.
The market's drop followed the Federal Reserve's decision Tuesday to leave interest rates unchanged, although the central bank hinted of possible increases later this year.
"There's a lot of concern that when rates go up, the recovery will slow down," said Stephen Carl, head of U.S. equity trading for The Williams Capital Group LP.
The Dow Jones industrial average fell 133.68, or 1.3 percent, to 10,501.57 after rising 57.50 Tuesday to close at its highest level of the year, 10,635.25. The Dow has advanced for five weeks on increasing signs that business is improving.
While stocks rallied Tuesday after the Fed's move affirmed that the recession could soon be over, "we are having afterthoughts today. ... Economists believe the Fed will reverse last year's trend of rate cuts with a rate hike in June or September," said Alan Ackerman, executive vice president of Fahnestock & Co.
The broader market also declined Wednesday. The Nasdaq composite index fell 48.00, or 2.6 percent, to 1,832.87, its lowest close since March 1 when it stood at 1,802.74.
The Standard & Poor's 500 index declined 18.44, or 1.6 percent, to 1,151.85.
Traders said they were concerned that the Fed would raise interest rates before corporate earnings improve, which would make it difficult for them to justify stocks' current prices.
"The reality that the (interest rate) tightenings are going to come at some point is just something to make you a little nervous," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee.
Dow industrial Intel fell $1.19 to $30.53 after Salomon Smith Barney lowered its second-quarter earnings and revenue estimates for the chipmaker. Competitor Advanced Micro Devices also fell, declining 62 cents to $14.17.
Other tech losers included Microsoft, down $2.13 at $60.10, and IBM, off $1.99 at $105.50. Both are Dow stocks.
Analysts say the technology sector will be the last to emerge from the recession as it waits for other companies to resume spending on computers and networking equipment. But they also say investors are anxious for these growth stocks to recover, and are more sensitive to negative reports about them.
Investors in the past month have heard upbeat reports from Old Economy sectors including manufacturing. So Wednesday's news that new home construction rose a bigger-than-expected 2.8 percent in February and to its highest level since December 1998 failed to trigger much buying.
And, home builders fell, which analysts attributed to the prospect of higher interest rates. Lennar fell $2.17 to $52.62 despite also beating first-quarter earnings estimates by 4 cents a share.
The financial sector, which is also sensitive to interest rates, also dropped. Banker J.P. Morgan Chase fell 90 cents to $35.19.
One of Wall Street's biggest losers was Bristol-Myers Squibb, which plunged nearly 16 percent, down $7.57 at $41.08, after disclosing that tests of its much anticipated blood pressure drug, Vanlev, showed it was no more effective than existing treatments.
Declining issues outnumbered advancers slightly more than 2 to 1 on the New York Stock Exchange. Trading volume was moderate at 1.27 billion shares, ahead of Tuesday's 1.25 billion shares.
The Russell 2000 index, which measures the performance of smaller company stocks, fell 5.69, or 1.1 percent, to 499.04.
Traders overseas were also unnerved by the possibility of higher interest rates. The Fed reduced rates 11 times in 2001 to stimulate the economy, and quash the first recession in more than a decade.
"Europeans are concerned with the possibility that higher interest rates in America may work their way around the world, and other central banks will raise their rates," Ackerman said.
In Europe, Germany's DAX index fell 1.8 percent, while France's CAC-40 and Britain's FT-SE 100 each lost 0.9 percent.
Japan's Nikkei stock average fell 2.3 percent.
------On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com