11 Jun 2009

Wall St falls as rate worries dent recovery hopes

8:43 am on 11 June 2009

US stocks fell on Wednesday on worries that rising interest rates could put a damper on consumer and business spending.

However stocks pared losses late in the session to finish off the day's lows.

The market had extended losses after a 10-year Treasury note auction sparked a sell-off in bonds, pushing yields briefly above 4% for the first time since October.

Stocks recovered from the sell-off after the bond market rebounded.

Investors are worried that higher yields, which act as a benchmark for many lending rates, could handcuff an economic recovery.

The Dow Jones industrial average fell 24.04 points, or 0.27%, to 8,739.02.

The Standard & Poor's 500 Index slid 3.28 points, or 0.35%, to 939.15.

The Nasdaq Composite Index dropped 7.05 points, or 0.38%, to 1,853.08.

Banks lead rise in Europe

Banks were the leading movers as European shares closed higher on Wednesday.

Energy stocks were also given a boost by surging crude prices.

The pan-European FTSEurofirst 300 index of top shares closed up 1.2% at 879.98 points after choppy trade earlier in the session.

The benchmark index has gained around 36% since its lifetime low on March 9 as investors have become more confident on the prospects for economic recovery.

In London, the FTSE 100 closed at 4,436.75 points, up 31.96 or 0.73%.

In Frankfurt, the DAX index ended at 5,051.18 points, up 53.32 or 1.07%.

In Paris, the CAC-40 index closed at 3,315.27 points, up 18.54 or 0.56%.