NEW YORK - One day after the Dow Jones industrial average topped 11,000, U.S. stocks fell today amid concern bonds may start looking more attractive than equities. American Express Co. led the Dow to its worst loss in five weeks.
Dow off 128.58
The Dow average fell 128.58, or 1.2 percent, to close at 10,886.11, its biggest loss since March 31.
The Standard & Poor's 500 Index sank 22.63, or 1.7 percent, to 1332.00, led by financial shares. The Nasdaq composite index dropped 50.46, or 2 percent, to 2,485.12.
Decliners led advancers by an 8-to-7 margin on the New York Stock Exchange, with 1,395 up, 1,583 down and 558 unchanged. NYSE volume totaled 933.23 million shares vs. 934.4 million yesterday.
The NYSE composite index fell 8.08 to 636.10, and the American Stock Exchange composite index lost 0.97 to 785.70. The Russell 2000 index of smaller companies fell 0.69 to 432.59.
The 30-year bond fell 25/32, or $7.81 per $1,000 security, to 93 3/8, pushing its yield up 6 basis points to 5.72 percent, the highest since July 30.
"A bond yield edging toward 6 percent is bad for stocks," said John Jares, who manages $110 million in the Berger Balanced Fund in Denver.
"Bonds look like a more attractive investment than equities because you can get a higher yield than before and there's less risk."
Bond yields are at nine-month highs on concern that the economy may be growing fast enough to accelerate inflation, which eats into bonds' fixed payments. Higher borrowing costs make it more expensive for companies to finance their businesses.