Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Dow falls to worst close since March 9

Associated Press The Spokesman-Review

U.S. stocks continue fall after Bernanke’s hawkish comments, global markets follow

Stocks dropped for the second straight session Tuesday, with the Dow Jones industrial average falling to its worst close since March 9. Global markets also sold off as inflation fears worsened.

The Dow lost more than 110 points in midday trading before narrowing its loss later in the session. The index dropped nearly 200 points Monday after Federal Reserve Chairman Ben Bernanke spooked Wall Street by saying that the central bank will remain vigilant in fighting inflation.

Investors have been hoping the Fed would stop increasing short-term interest rates after 16 hikes; the nation’s benchmark rate now stands at 5 percent. However, Bernanke’s comments in recent weeks have repeatedly shaken investors and sent stocks tumbling.

“Bernanke came in with this reputation as a great communicator,” said John Caldwell, chief investment strategist for McDonald Financial Group, part of Cleveland-based KeyCorp. “Most of us would choose to go back to the general confusion (former Fed Chairman Alan) Greenspan created.”

The Dow fell 46.58, or 0.42 percent, to 11,002.14. The index tumbled 199.15 points, or 1.77 percent, during Monday’s session.

Broader stock indicators were also lower. The Standard & Poor’s 500 index fell 1.44, or 0.11 percent, to 1,263.85, and the Nasdaq composite fell 6.84, or 0.32 percent, to 2,162.78.

Declining issues led advancers by more than 2 to 1 on the New York Stock Exchange.

Stocks in most Asian markets fell hard Tuesday, with Tokyo’s Nikkei 225 index down 1.81 percent, while India’s benchmark index fell 2.51 percent. The major European indexes also dropped, with Ireland’s benchmark index down 4.89 percent and Austria’s benchmark falling 4.75 percent.

Bonds rose, with the yield on the 10-year Treasury note falling to 5.01 percent from 5.02 percent late Monday. The U.S. dollar was mixed against other major currencies, while gold prices were lower.

Crude oil futures were down slightly. A barrel of light crude settled at $72.50, down 10 cents, in trading on the New York Mercantile Exchange.

Volume on the New York Stock Exchange came to 1.90 billion shares, up from 1.63 billion on Monday.

The Russell 2000 index of smaller companies fell 2.96, or 0.41 percent, to 710.96.

In other overseas markets, Britain’s FTSE 100 fell 1.60 percent, Germany’s DAX index dropped 2.11 percent, and France’s CAC-40 lost 2.40 percent.