Dow drops almost 400 points on Federal Reserve rate concerns

September 9, 2016

U.S. stocks fell sharply Friday, pulling the Dow Jones industrial average down almost 400 points, giving the market its worst day since June 24 and worst week since January. Telecom, utilities and materials companies led the broad slide. Energy stocks slumped as crude oil prices fell.

The stock market swoon and a rise in bond yields came as remarks from a Federal Reserve bank president fueled speculation among investors that the central bank may raise its key interest rate this year. Ultra-low interest rates have been a key driver of an extended stock market rally.

The Dow Jones industrial average fell 394 points, or 2.1 percent, to 18,085.

The Standard & Poor's 500 index shed 53 points, or 2.5 percent, to 2,127. The rout halted a period of calm that saw the S&P head no more than 1 percent in either direction for 43 days.

The Nasdaq composite fell 133 points, or 2.5 percent, to 5,125. The Nasdaq had notched record-high closes on Tuesday and Wednesday.

In a speech early Friday, Fed Bank of Boston President Eric Rosengren suggested a case could be made for the central bank to raise its key interest rate sooner rather than later. The Fed is scheduled to hold a policy meeting later this month. In recent weeks, few Fed observers have expected the Fed to lift rates this month, but a December hike is looking more likely, said JJ Kinahan, chief strategist at TD Ameritrade.

"We have a good probability that we're getting it by the end of the year," Kinahan said.



Recent Articles by Associated Press

Comments powered by Disqus