U.S. stocks on Friday headed firmly lower at the start of trade as comments from Federal Reserve Bank of Boston President Eric Rosengren about raising benchmark interest rates has rattled investors. Rosengren’s comments come less than two weeks ahead of the Federal Open Market Committee’s policy-setting meeting on Sept. 20-21. Rosengren is a voting member of the FOMC, who has been relatively pro-rate hike. The Dow Jones Industrial Average was off 140 points, or 0.8%, at 18,430, the S&P 500 index fell 16 points, or 0.8%, at 2,164. Meanwhile, the Nasdaq Composite Index dropped 37 points, or 0.7%, at 5,221. Continued rhetoric about the potential for rate hikes sooner than later over the past few weeks by Fed members has fostered skittishness among investors who have enjoyed an extended period of ultralow interest rates. Other markets reacted to the prospect of higher rates. Yields for the 10-year benchmark Treasury note rose to 1.66%, firmly breaking above 1.6% for the first time in weeks and the dollar, as measured by the ICE U.S. Dollar Index , climbed 0.4%, signaling that at least some traders are bracing for a rise in interest rates seriously. The dollar tends to strengthen amid climbing interest rates, while government bonds usually sell off as the prospect of higher rates results in investors selling existing lower-yielding bonds. Yields and prices move in the opposite direction.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News
