Dow Retreats As Inflation Concerns Intensify
Technology shares continued to show signs of recovery, lifting some sectors, but blue-chip shares pulled back late in Tuesday’s trading as inflation and interest rate worries intensified.
The Dow Jones industrial average fell 66.20, or nearly 1 percent, to 6,852.72, after meandering in a tight range through much of the day.
Broader stock measures ended mixed, with the technology-rich Nasdaq market managing to hold a modest gain.
Bonds provided some early support for stocks, but then retreated after the Commerce Department reported that January’s unseasonably warm weather in the Northeast and South helped push sales of new homes to a nearly 11-year high.
“What you’re seeing here is a little bit of worry that at the next (Fed policy meeting on March 25), there’s going to be token increase in interest rates,” said Thom Brown, market strategist for Rutherford, Brown & Catherwood of Philadelphia.
Advancing issues outnumbered decliners by a 5-to-4 margin on the New York Stock Exchange. NYSE volume totaled 536.28 million shares as of 4 p.m., up sharply from Monday’s sluggish pace.
Some of the stocks that moved substantially or traded heavily Tuesday:
AT&T;, down 7/8 at 36.
The stock fell for a second day amid worries about this year’s earnings for the telecommunications giant.
McDonald’s, up 3/4 at 44-1/8.
Footstar, up 1-1/2 at 27-3/8.
Merrill Lynch raised its intermediate-term rating on McDonald’s to “buy” from “accumulate,” the Dow Jones News Service reported. Merrill also started coverage of footwear retailer Footstar with an intermediate-term and long-term “buy” rating.
America Online, up 3 at 43.
The nation’s largest online service announced plans to allow advertisers to post messages in its Internet chat rooms.
Tupperware, down 8-1/4 at 35-7/8.
The maker of food-storage containers expects its first-quarter earnings to be below Wall Street estimates due to lower-than-expected sales and unfavorable foreign exchange rates.
UAL, up 4-1/4 at 64-1/8.
The parent of United Airlines said its firstquarter earnings will exceed Wall Street expectations, citing increased passenger traffic.
SystemSoft, down 5-3/16 at 11-13/16.
The maker of operating systems applications reported a fourth-quarter loss of $42.1 million, including a one-time charge of $46.5 million.
Reliance Acceptance Group, down 2-7/8 at 12-3/8.
The auto-lender unexpectedly posted a fourth-quarter loss after increasing a provision for bad loans.
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