US Stocks-Indexes drop on interest rate worries
US stocks fell as rising bond yields stoked concerns that higher borrowing costs could cut into corporate profits and put a damper on deal activity.business Updated: Jun 12, 2007 21:50 IST
US stocks fell on Tuesday as rising bond yields stoked concerns that higher borrowing costs could cut into corporate profits and put a damper on deal activity.
A disappointing outlook from Texas Instruments (TXN N: Quote, Profile, Research sent the chip-maker's shares down 2 percent and dented optimism about tech spending.
As the yield on benchmark 10-year Treasury notes (US10YT=RR: Quote, Profile, Research rose, investors sold shares of interest-rate sensitive companies, including retailers and homebuilders.
Fears higher rates could raise borrowing costs and stifle growth hurt industrial shares too, including those of plane maker Boeing Co (BA.N: Quote, Profile, Research, while retreating oil prices pressured shares of energy companies such as Exxon Mobil Corp (XOM.N: Quote, Profile, Research.
"Levels of angst remain elevated due primarily to concerns about interest rates," said Frederic Ruffy, analyst at options education firm Optionetics in Chicago.
The Dow Jones industrial average (DJI: Quote, Profile, Research fell 43.89 points, or 0.33 percent, at 13,381.07. The Standard & Poor's 500 Index (SPX: Quote, Profile, Research slipped 4.51 points, or 0.30 percent, at 1,504.61. The Nasdaq Composite Index (IXIC: Quote, Profile, Research was down 11.09 points, or 0.43 percent, at 2,561.06.
The benchmark 10-year US Treasury note fell 10/32 in price, pushing yields up to 5.21 percent from 5.17 percent late on Monday. For details see [US/].
First Published: Jun 12, 2007 21:43 IST