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Rising inflation fears slam stocks { May 2007 } Original Source Link: (May no longer be active)    http://seattletimes.nwsource.com/html/businesstechnology/2003737491_stox07.html http://seattletimes.nwsource.com/html/businesstechnology/2003737491_stox07.html Markets Rising inflation fears slam stocks By TIM PARADIS The Associated Press NEW YORK — Stocks slid for a second straight session Wednesday after an increase in labor costs stirred concerns about inflation and interest rates. The Dow Jones industrial average fell 129.79 to 13,465.67. Microsoft, one of the 30 Dow stocks, shed 29 cents to close at $30.29. Boeing, also a Dow stock, fell $1.21 to $98.29. The Standard & Poor's 500 index fell 13.57 to 1,517.38, and the Nasdaq composite index fell 24.05 to 2,587.18. Economic data showing unit labor costs climbed a higher-than-expected 1.8 percent raised concerns of inflationary pressures. The Labor Department also reported productivity waned in the first quarter as expected. The readings did little to alleviate investor concerns that the Federal Reserve might lean toward raising rates rather than lowering them. The inflation jitters came alongside the European Central Bank's widely expected decision to raise its key interest rate by a quarter of a percentage point to 4 percent. "In the last week or two, the expectation that the Fed was going to lower interest rates in the next six months has been put to the side, so the bond market has reacted," said George Shipp, chief investment officer at investment adviser Scott & Stringfellow, referring to a recent rise in bond yields. Yields, which move higher as bond prices fall, have increased as investors have regarded a reduction in interest rates as less likely. Shipp contends investors shouldn't read too much into the pullback in stocks. "The market has come a long way. We're down for a couple days, but we've been up for 11 out of the last 12 months. Right now you'd have to call it normal profit taking." Wall Street has kept a close eye on the Treasury market as the 10-year note's yield approaches 5 percent, a level not seen since August. The yield on the benchmark 10-year Treasury note fell to 4.97 percent from 4.98 percent late Tuesday. Copyright © 2007 The Seattle Times Company

Bernanke warns of housing downturn woes { July 18 2007 } Bond yields see biggest jump in years { June 7 2007 } Company buybacks artificially inflate stocks { June 2007 } Dow plummets over 400 points { July 26 2007 } Dow shoots passed 14k then falls back { July 18 2007 } Economists say prices must go up { May 2007 } Fed rate fear based on higher bond yields { May 2007 } Florida and california have riskier real estate markets Housing foreclosures jumped 90 perc in year { May 2007 } Housing slump to weigh heavily economy { June 1 2007 } Miami condo glut pushes florida economy recession Most americans say economy is getting worse { June 19 2007 } Rising inflation fears slam stocks { May 2007 } Stocks plunge on mortgage bond conern { May 2007 } Trade gap hurt US economic growth { June 1 2007 } US cities moving to european model of rich center { June 2 2006 } Wheat prices hit record high { June 11 2007 } Files Listed: 17

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