Rate Jitters Hurt Stocks And Bonds --- Dollar Also Retreats; Rubin's Comments Are Cited in Drops
A chorus of inflation-related worries pushed down stocks, bonds and the dollar, knocking back the Dow Jones Industrial Average from Monday's record.</br></br>Traders said the declines didn't focus on one particular area. The industrial average lost 45.09, or 0.49%, to close at 9147.57, nearly canceling out all of Monday's 45.59-point gain. The Nasdaq Composite Index lost 13.95 to 1864.91 and Standard & Poor's 500-stock index fell 6.57 to 1115.50.</br></br>The bellwether 30-year Treasury bond fell 23/32, or $7.18 per $1,000 bond, to push up its yield to 5.98%, again approaching the closely watched 6% level.</br></br>Traders blamed the broad-based declines on worries that the Federal Reserve might be preparing to raise interest rates at its next monetary-policy meeting May 19. Volume was relatively light as many investors chose to stay out of the market.</br></br>Inflation worries focused first on April's employment numbers, due to be announced Friday. If those indicate strong gains, some people fear, it could push the Fed to act. Then word spread that Fed Chairman Alan Greenspan was scheduled to meet President Clinton and Treasury Secretary Robert Rubin yesterday afternoon. The White House said the meeting was on the economy, not interest rates, but speculation spread that they might be laying the groundwork for a rate boost.