Closing Bell: Markets Tumble on Fears of Higher Interest Rates

China Factory Workers
Getty Images
Rattled Markets Continue Sell Off for Second Day: Stocks ended Thursday with big losses, as the major indexes each lopped off about 2 percent, driven lower by comments by the Federal Reserve that it may soon begin winding down its bond-buying program.

The Dow Jones industrial average (^DJI) is down 354 points, its worst one-day slide of the year, and biggest percentage drop since November 2011. The S&P 500 (^GSPC) lost 41 -- its biggest drop since 2011 -- and the Nasdaq (^IXIC) sank 79. In addition to fears about the Fed's plan to scale back its stimulus plan, investors were also shaken by data showing China's economy is slowing. A survey of factories showed activity slumping to a nine-month low as demand weakened.

Concerns about the end of the Fed's stimulus efforts prompted selling in the bond markets, sending interest rates up, to a two-year record. Commodities suffered steep losses as well, with gold prices falling by 7 percent, silver by 9, and copper by 3. Light sweet crude oil prices dropped by 3 percent, and natural gas lost 2.

Here's a roundup of other items that made business news Thursday:
  • Amid the broad market sell-off, shares of US Airways (LCC) lost almost 2 percent. A government review, released Wednesday, found that the planned merger of American Airlines and US Airways would result in a greater loss of airline competition than the 2010 merger of United Airlines (UAL) and Continental Airlines.
  • Kroger (KR) raised its outlook for the year after the country's largest traditional supermarket chain reported a fiscal first-quarter profit that beat Wall Street expectations.
  • Rite Aid (RAD) notched its third-straight quarterly profit, as generic drugs and expense reductions continued to help the nation's third largest drugstore chain.
  • Pier 1 Imports (PIR) first-quarter net income rose 14 percent, buoyed by strong full-priced selling of its home decor items.
  • Sales of previously owned homes rose to a 3½-year high in May, according to the National Association of Realtors. The group said that existing home sales advanced 4.2 percent to an annual rate of 5.18 million units, the highest level since November 2009, when a home-buyer tax credit was expiring.
  • The number of Americans filing new claims for unemployment benefits rose more than expected last week, but not enough to signal a material shift from the recent pace of moderate job growth. Initial claims for state unemployment benefits increased 18,000 to a seasonally adjusted 354,000, while analysts had forecast the number to rise to 340,000.
Looking ahead to Friday:
  • CarMax Group (KMX) and Darden Restaurants (DRI) are both scheduled to report earnings before the opening of U.S. markets. Darden, which operates Olive Garden and Red Lobster chains, has suffered from a slowdown in foot traffic, as budget conscious consumers have turned to fast-food chains such as Panera Bread (PNRA) and Chipotle Mexican Grill (CMX) that offer quality food at lower prices. Analysts expect Darden to earn a profit of $1.04 a share on revenue of $2.27 billion in its fiscal fourth quarter. That compares with per-share earnings during the same quarter last year of $1.15.
  • No economic reports are scheduled for the day, but Friday is a quadruple witching day -- the quarterly expiration of stock and index options, as well as stock and index futures. As CNBC reports, though, it's no longer the big deal on Wall Street that it once was.

Compiled from staff and wire reports.

Increase your money and finance knowledge from home

Introduction to Economic Indicators

Measure the performance of the economy.

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

This is calculated way how to steel from hard working peole savings and retirement 401 K, It is calculated forward, throu you a chiken wing and take whole stake, like Social Security increase your monthly income $ 11 and take out $ 20 for their programs to throw party in White House.
Whats New, can some one tell the truth in this country?

June 21 2013 at 7:10 AM Report abuse +1 rate up rate down Reply

doomtards rejoice as THE END IS NEAR.

THE REST OF US should get out to the supermarkets and dollar stores and DO THE BEST WE CAN.

June 21 2013 at 12:24 AM Report abuse rate up rate down Reply

Awwwwwwwwww Rich people didnt make any money ,,,,lol

June 21 2013 at 12:12 AM Report abuse +1 rate up rate down Reply

rates going up and the market correcting was all due sooner or later, everyone knew it.. Just when was the question...and now, we have the answer. Sure glad I refied my rentals and bought more in the last 18 months, that window is closing.

June 21 2013 at 12:02 AM Report abuse rate up rate down Reply

Ever since 1987 crash the stock market has been pumped up by computer technology. The American Dream as been has become a nightmare.

June 20 2013 at 11:33 PM Report abuse rate up rate down Reply

The real inflation is in stocks.

June 20 2013 at 11:26 PM Report abuse +1 rate up rate down Reply

OBAMA's fault.

June 20 2013 at 9:40 PM Report abuse rate up rate down Reply
1 reply to alphaome4's comment

this drop is small compared to what will happen when obamacare kicks in.

June 21 2013 at 8:01 AM Report abuse -1 rate up rate down Reply

OBAMA's fault.

June 20 2013 at 9:40 PM Report abuse rate up rate down Reply

They're worried that we might get 2% instead of 1.5% for a 5 year CD?

June 20 2013 at 9:34 PM Report abuse rate up rate down Reply

Hello IRS,,,,,WASHINGTON,,,,are you checkingmy mail.?? Does not bother me.!!!!

Why is the GOVERMENT trying to destroy Walmart.?????? I admitt,,I do not like them as I once did.......But,,it is none of the GOVERMENTS BUSSINESS.!!!!
People,,,,watch your goverment closely,,,,,,Democrate or Republican,,,does not matter.!!!!!!!!

June 20 2013 at 8:44 PM Report abuse +1 rate up rate down Reply