Bond Woes Lead to Fall In Stocks --- Personal-Income Rise Contributes to Slide; Dollar Gains Sharply
A souring bond market pulled stock prices lower, but the dollar posted sharp gains against most major currencies.</br></br>Analysts said bond prices began to weaken shortly after the government reported that personal incomes rose an unexpectedly strong 1.8% in January. The report included a measure of inflation that rose 0.6%, further evidence that inflation remains a problem.</br></br>The slide in bonds, exacerbated by some technical factors, spread to stocks as the day wore on. The Dow Jones Industrial Average, which rose about 15 points in early trading, ended 15.35 lower at 2243.04 in moderate trading.</br></br>Investors are hypersensitive to any hint that inflation may be getting out of control. They were shaken late last week when the Federal Reserve pushed short-term interest rates aggressively higher in an effort to restore confidence in the central bank's anti-inflation fight.</br></br>While financial markets seemed to stabilize Monday and Tuesday, analysts said yesterday's performance is evidence of continuing skittishness.