Newspaper article THE JOURNAL RECORD
Rising Interest Rates Spur Investors to Dump Stocks
NEW YORK (AP) _ Investors dumped stocks again Thursday as rising interest rates sent the market reeling for a second straight session.
The Dow Jones industrial average skidded 36.89 to 3,624.98, extending the previous session's slide that knocked more than 35 points off the popular stock market measure.
Things were no better in the broader market and declining issues vastly outnumbered advances on the New York Stock Exchange by a margin of more than 3-to-1.
Losers were scattered through many sectors but companies such as banks and utilities that are especially sensitive to higher interest costs took the worst beating.
The selloff came in heavy trading. Volume on the floor of the Big Board amounted to 320.98 million shares as of 4 p.m. EDT, compared to Wednesday when 342.11 million shares changed hands.
The bearish sentiment that weighed down stocks represented a continuation of Wednesday's trend and reflected a spreading perception that interest rates have nowhere to go but up as economic growth accelerates. Low rates have been the chief force behind the stock market's lengthy advance.
New reports furnished fresh evidence that the economic expansion has gained momentum, which deeply depressed prices in the bond market. Government statistics showed productivity of American workers improved, orders to U.S. factories increased and unemployment benefit applications declined.
The trio of upbeat reports kept the bond market in retreat. A plunge in bond prices caused a corresponding jump in interest rates with the 30-year Treasury bond ending more than point lower, driving up its yield to 6.16 percent from 6.12 percent late Wednesday.
But there was a feeling on Wall Street that the bond market's pessimism was overdone.
"There's definitely a nervousness hanging over the market that is driven by interest rates that are reversing direction. But I think the bond market is getting emotionally carried away with economic developments," said William Dodge, chief investment strategist at Dean Witter Reynolds. …