NEW YORK -- Stocks fell sharply today as a government report signaled that wages are rising faster than expected in a tight labor market, heightening inflation jitters and setting the stage for a possible increase in interest rates. Dow off 181;
Nasdaq loses 66The Dow Jones industrial average sank 180.78 points to close at 10,791.29, a loss of 1.65 percent. The index managed a modest rebound late in the session, recovering from a loss of as much as 258.04.
Even with the drop today, the biggest since a 191.55-point fall on July 20, the Dow still is up 17.5 percent so far this year, well above expectations when 1999 began.
The Standard & Poor's 500 fell 24.37, or 1.78 percent, to 1,341.03. The Nasdaq composite index fell 65.83, or 2.43 percent, to 2,640.01. Decliners beat advancers by an 11-to-4 margin on the New York Stock Exchange, with 2,239 down, 804 up and 488 unchanged. NYSE volume totaled 769.02 million shares vs. 694.75 million yesterday. The NYSE composite index fell 9.59 to 630.81, and the American Stock Exchange composite index dropped 5.01 to 784.59. The Russell 2000 index fell 5.03 to 441.58.
The 30-year bond fell 3/4, or $7.50 per $1,000 face amount, to a price of 88 26/32. Its yield rose 6 basis points to 6.07 percent, and earlier touched 6.12 percent, the highest level since June 25.
The Labor Department said today its Employment Cost Index, considered the best measure of changes in wages and benefit costs, rose 1.1 percent in the second quarter. The bigger-than-expected jump followed a record low 0.4 percent increase during the first three months of 1999.