New York – Wall Street slumped Tuesday as investors looked past another round of acquisitions and grew increasingly anxious about the Federal Reserve’s upcoming decision on interest rates.
The Dow Jones industrials tumbled more than 120 points.
With the Fed meeting today and Thursday to discuss its rate policy, Tuesday’s stronger-than-expected economic data raised fears that the central bank would signal that more hikes are coming. It’s nearly a foregone conclusion that the Fed will nudge rates a quarter percentage point higher; investors are worried about rate hikes in August and beyond.
A mild drop in existing-home sales and an unexpected jump in consumer confidence showed the economy was moderating but remained sturdy, although investors were not consoled.
“As we look at that data, there’s nothing that raises hopes that the Fed won’t lift rates,” said Art Hogan, chief market analyst for Jefferies & Co. “I think this market is going to bounce around in this trading range, with the path of least resistance to the downside.”
At the close, the Dow plunged 120.54, or 1.09 percent, to 10,924.74.
Broader stock indicators also fell sharply. The Standard & Poor’s 500 index dropped 11.36, or 0.91 percent, to 1,239.20, and the Nasdaq composite index lost 33.42, or 1.57 percent, to 2,100.25.
The Bloomberg Colorado Index, a price- weighted list of companies based in the state, fell 3.6 to 332.71. More than three stocks declined for every one that advanced, with six unchanged.
Bonds recouped some of their recent losses but remained near historic lows, with the yield on the 10-year Treasury note slipping to 5.21 percent from 5.24 percent late Monday. The U.S. dollar was little changed against other major currencies. Gold prices lingered near $585 an ounce. A barrel of light crude oil added 12 cents to $71.92 on the New York Mercantile Exchange.
