NEW YORK - The Dow Jones industrial average plunged nearly 140 points today as some surprisingly strong economic data reignited inflation fears, undermining hopes the Federal Reserve won't raise interest rates next week. Dow plummets 138.88
The Dow, which yesterday closed above 7,300 for the first time, lost 138.88 points, or 1.9 percent, to close at 7,194.67, trimming the week's gain to 25.14.
The technology sector was weighed down by a disappointing profit report from Hewlett-Packard Co., which accounted for 20 points of the Dow's drop.
Most broad-market measures also pulled back sharply from yesterday's record-setting advance.
Decliners led advancers by a 3-to-2 margin on the New York Stock Exchange, with 991 up, 1,479 down and 896 unchanged. NYSE volume was 485.78 million shares vs. 457.18 million yesterday.
The Standard & Poor's 500-stock list fell 12.13 to 829.75, and the NYSE composite index fell 5.21 to 432.44. Both measures had closed at record highs yesterday. The Nasdaq index fell 12.84 to 1,340.74, and the American Stock Exchange composite rose 3.25 to 586.72.
Stocks were pressured from the open by the bond market, which was weighed down by two reports revealing surprisingly strong consumer sentiment and housing construction.
The reports countered some recent signs that economic activity may be slowing enough to avoid an inflationary flare-up without another increase in interest rates by the Federal Reserve.
The Fed's policymakers, who in late March moved to ease inflationary pressures by raising one of the central bank's key lending rates, are scheduled to meet again on Tuesday.
As bonds fell today, the yield on the 30-year Treasury bond - a key determinant of long-term borrowing costs - rose as high as 6.91 percent from late yesterday's 6.86 percent. Bond prices and yields move in opposite directions.