NEW YORK - The continued threat of higher interest rates pushed stocks lower in listless trading today, inflicting the steepest damage on highly priced technology stocks.
Dow off 47.8
The Dow Jones industrial average fell 47.80 to close at 10,863.16, having surrendered a modest gain at midday. Broader stock indicators were lower as well. The Standard & Poor's 500 fell 9.18 to 1,347.76, and the Nasdaq composite index dropped 73.21 to 2,619.19.
Decliners led advancers by a more than 2-to-1 margin on the New York Stock Exchange, with 2,024 down, 957 up and 523 unchanged. NYSE volume totaled 616.35 million shares vs. 632.54 million Friday. The NYSE composite index fell 2.97 to 635.90; the American Stock Exchange composite index dropped 5.50 to 790.79; and the Russell 2000 index of smaller companies fell 5.51 to 442.87.
Also today, the prospect of higher interest rates has pushed bond prices lower, driving yields higher. The 30-year Treasury bond yielded 6.03 percent by late afternoon after returning above 6 percent on Friday. Yields on two-year notes were unchanged at 5.57 percent.
Nervous investors have begun to believe that the Federal Reserve will raise interest rates as early as next month in an effort to hold off inflation. Fed Chairman Alan Greenspan, who raised that possibility in Congressional testimony last Thursday, will address a Senate panel on Wednesday.
John H. Shaughnessy, chief investment strategist at Advest Inc., said Greenspan appears to be laying ground for another modest rate increase, following the quarter-point increase imposed last month.