Rates weigh heavily on the market

 

WALL Street stocks closed lower yesterday as higher interest rates intensified the pressure on equities. The Dow Jones Industrial Average fell by 0.78 per cent, ending a brief streak in which the blue chips set record highs in two straight sessions, despite weakness in the bond market.

Analysts said the bond market's weakness had finally caught up with stocks.

Concerns about interest rates, which resurfaced in force after a surprisingly strong national Association of Purchasing Management report last week, have intensified ahead of two key economic reports due today and tomorrow - the producer price index and monthly employment figures.

The Standard & Poor's 500 fell 4.82 to 748.41 while the Nasdaq Composite also slipped 7.38 to 1320.35. Volume remained heavy, totalling 556.6 million shares on the New York Stock Exchange, where those stocks declining narrowly outnumbered those which were advancing.