Stocks Fall As Bond Yields Rise; Dow Closes Off 120 After Late Rebound
Stocks closed mostly lower today as revived fears of rising interest rates distracted investors from the latest good news about corporate profits.</br></br>The Dow Jones industrial average fell 120.32 points to close at 10,349.93, having recovered from a loss of as much as 155 points.</br></br>Broader stock indicators contained their slide. The Standard & Poor's 500-stock index fell 8.02, to 1293.63, and the Nasdaq composite index fell 0.57, to 2815.95.</br></br>Stocks fell after bond yields rose early in the day. Analysts said bond prices, which move in the opposite direction from yields, were hurt by a European Central Bank official's suggestion that the European economy is solid, but in danger of succumbing to rising inflation.</br></br>That warning sounded familiar to U.S. investors, who fear the Federal Reserve will soon raise interest rates to cool the robust growth of the U.S. economy. Yields on bonds, which are highly sensitive to inflation, have reached their highest levels since October 1997, drawing some investors away from stocks in favor of the fixed returns available on bonds.