updated 3/24/2006 9:45:34 AM ET 2006-03-24T14:45:34

Wall Street had a renewed case of interest rate anxiety Thursday, with stocks falling on strong economic news and a jump in oil prices that heightened worries about inflation.

Major Market Indices

A 5.2 percent upswing in monthly sales of existing homes eased worries about a slowdown in the housing market but fed fears that the Federal Reserve will continue boosting interest rates to stave off price inflation. The Fed’s Open Market Committee meets next week.

Investors also fretted about a Labor Department report that 302,000 workers applied for jobless benefits last week , down 11,000 from the week before and marking the first decline in a month. The implied job growth added to Wall Street’s inflation and interest rate concerns.

The unemployment numbers “increase the probability the Fed will make its way back to 5 percent,” said Robert Tipp, chief investment strategist for Prudential Fixed Income.

The Dow Jones industrial average was down 47.14 points, or 0.42 percent, at the close. On Wednesday, the Dow rose 81.96 points, or 0.73 percent, to its highest level since May 21, 2001.

The broader Standard & Poor’s 500-stock index fell 3.37 points, or 0.26 percent, while the Nasdaq composite index, full of technology stocks, closed the day down 3.20 points, or 0.14 percent.

Bonds slipped, with the yield on the 10-year Treasury note rising to 4.74 percent from 4.70 percent late Wednesday. The U.S. dollar was higher against other major currencies. Crude oil futures surged .

The National Association of Realtors said sales of existing homes totaled 6.9 million in February , even as mortgage rates recover from all-time lows. Economists were expecting 6.5 million homes sold.

“You’ve got good home sales figures showing some decent economic growth, and you’ve got crude oil prices up. You put those together, and that creates worries that the Fed is going to keep going on rates,” said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons.

In corporate news, General Motors Corp.’s sale of a 78 percent stake in its commercial mortgage division for $1.5 billion in cash did little to prop up the market. The day before, GM said it plans to offer buyouts to more than 125,000 hourly workers at Delphi Corp., its former auto-parts unit. GM fell one cent to $22.

Adobe’s stock dropped on its earnings report, sliding 29 cents to $36.33.

Cereal and snack-food maker General Mills Inc. posted a 7 percent rise in third-quarter profit , topping Wall Street estimates as sales improved across its business segments. General Mills rose 25 cents to $50.23.

Dell Inc., the world’s largest personal computer maker, fell 7 cents to $30.34 after it announced it would buy privately held Alienware Corp. , whose high-end PCs are widely acclaimed by video gamers for their fast performance and sleek, UFO-themed looks.

Overseas, Japan’s Nikkei stock average fell 0.04 percent. In Europe, Britain’s FTSE 100 closed down 0.29 percent, France’s CAC-40 was unchanged and Germany’s DAX index rose 0.25 percent.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com