NEW YORK -- Stocks closed mostly lower today as bond yields soared to the highest level in more than two years on the fear that the Federal Reserve will suggest tomorrow that future interest-rate increases may be needed to cool the nation's economic growth.
Dow loses 113
The Dow Jones industrial average fell 113.16, or 1 percent, to close at 11,144.27.
Broader stock indicators were mixed. The Nasdaq composite index lost some of its early momentum but still finished 30.81 points higher to close at 3,783.87, its 55th closing record of 1999.
The Standard & Poor's 500 fell 2.96 to 1,418.09.
Decliners beat advancers by a 3-to-2 margin on the New York Stock Exchange, with 1,813 down, 1,295 up and 440 unchanged. NYSE volume totaled 902.23 million shares vs. 1.35 billion on Friday.
The NYSE composite index slipped 2.21 to 629.44; the American Stock Exchange composite index rose 1.35 to 831.15; the Russell 2000 index of smaller companies rose 0.98 to 467.19.
Stocks gave up early gains as the bond market faltered in midafternoon. The yield on the 30-year Treasury bond rose to 6.44 percent by late afternoon.
The last time bonds closed with a higher yield was Sept. 15, 1997. The long-term bond yielded 6.37 percent late Friday.
Bond prices fell amid worries about the Federal Reserve's last policy-making meeting of the year, set for tomorrow. Most analysts expect central bankers to leave short-term interest rates unchanged, but many are wary of a change to a "tightening" bias, which would mean the Fed is inclined to raise rates on any future signs of inflation.