US Stocks Fall on Concern of Rising Rates, Inflation
U.S. stocks tumbled again Thursday as investors continued to fret about the possibility of rising inflation and higher interest rates.
For the second time in four days, the Dow Jones industrial average sank more than 1,000 points, or 4.2 percent, to end Thursday day at 23,860.
The Standard and Poor’s Index, the benchmark for many index funds, also shed 100.66 points, or 3.8 percent, to close at 2,581. It last hit that low in mid-November.
The two indexes have dropped 10 percent from their all-time highs, set on January 26. That means they are in what is known on Wall Street as a “correction,” fueled by fears that a long stretch of low interest rates and tame inflation, which helped driven up stock prices, might be coming to an end.
As the day wore on, it became evident major U.S. stock indexes were headed toward their fifth loss in the last six days, erasing big gains in the first weeks of the new year.
Stocks began to tumble last Friday after the U.S. Labor Department reported wages grew rapidly in January, sparking concern of higher inflation and lower corporate profits.
Earlier in Europe, stock prices declined and bond yields increased after the Bank of England said it may boost interest rates in response to a strong global economy. Britain’s FTSE-100 Index fell 1.5 percent and Germany’s DAX plunged 2.6 percent.
The picture was brighter in Asia, where Japan’s Nikkei 225 Index climbed just over 1 percent, South Korea’s Kospi Index rose five-tenths of one percent, and Hong Kong’s Hang Seng Index gained four-tenths of one percent.