US stocks slid for a second straight session on Wednesday after an increase in labour costs stirred concerns about inflation and interest rates and as the yield on the benchmark 10-year Treasury flirted with 5 per cent. The Dow Jones industrials fell more than 120 points.
Data showing unit labour costs rose a higher-than-expected 1.8 per cent, raising concerns of inflationary pressures. The Labor Department also as expected reported that productivity of US workers waned in the first quarter. The readings did little to alleviate investor concerns that the inflation-wary Federal Reserve might lean toward raising rather than lowering rates later this year.
The inflation jitters came alongside the European Central Bank's widely expected decision to raise its key interest rate by a quarter of a percentage point to 4 per cent. Stocks in Europe fell sharply. According to preliminary calculations, the Dow fell 129.79, or 0.96 per cent, to 13,465.67.