Dow skids below 11,000 level on rate worries

Reuters via Yahoo ^ | 6/6/06 | Reuters

[philsfan24]

NEW YORK (Reuters) - The Dow Jones industrial average (^DJI - News) fell below the psychologically key 11,000 level for the first time in three months as U.S. stocks extended their fall amid worries that the Federal Reserve will keep raising interest rates.

Investors fear that higher rates would slow the economy and hurt corporate profits. A break below 11,000, which was a key near-term support level, could trigger additional weakness in the index, according to technical analysts.

The Dow Jones industrial average (^DJI - News) was down 49.22 points, or 0.45 percent, at 10,999.50. The Standard & Poor's 500 Index (^SPX - News) was down 5.10 points, or 0.40 percent, at 1,260.19. The Nasdaq Composite Index (NasdaqSC:^IXIC - News) was down 13.66 points, or 0.63 percent, at 2,155.96.

[gipper81]

Greenspan did not increase interest rates because of irrational exuberance.

I know that. He increased rates because he thought the economy was growing too fast. And the recession he caused in 2001 certainly reduced his fears of too fast growth! I mentioned irrational exuberance because it is linked to Greenspan talking down the stock market and being an asset manager at the time. Is this the role of the Fed? Of course not, just manage the money supply, damnit.

He increased rates because that's the only way to keep foreign investors buying T-bills at the treasury auctions.

Well...that certainly worked well didn't it?!

[Concentrate]

And to yours.