Stocks Plummet as Interest Rate Concerns Rise

Investors sold technology shares on concerns that rising interest rates would stifle consumer spending, leading to a decline in the stock market. The Nasdaq Composite Index fell 132.75 points, or 3.5 percent, to 3,652.7, while the Dow Jones Industrial Average dropped 247.58 points, or 2.3 percent, to 10,483.54. The S&P 500 declined 34.34 points, or 2.4 percent, to 1,411.95.

Key Takeaways:

• Seventy-five of 88 industry groups in the Standard & Poor's 500 Index declined.
• Technology shares, including Cisco Systems, Intel Corp, and Oracle Corp, plummeted as investors sold on concerns about interest rates.
• Retailers, including Wal-Mart Stores, also declined after Goldman Sachs reduced ratings.
• Novell, a software maker, dropped after missing profit projections, with shares falling to their lowest level since October 1998.
• Leading indicators of personal consumption suggest that spending growth will slow in the second half of the year.
• Retailers may be particularly hard hit due to slowing cyclical environment and cost pressures.

Statistics:

• S&P 500 Index declined 34.34 points, or 2.4 percent, to 1,411.95.
• Nasdaq Composite Index fell 132.75 points, or 3.5 percent, to 3,652.7.
• Dow Jones Industrial Average dropped 247.58 points, or 2.3 percent, to 10,483.54.
• Novell's shares have lost 70 percent this year.
• 2.2 percent increase in new orders placed at US factories in March.

Sources:

• Bloomberg News
• Goldman Sachs
• Novell
• American Express Financial Advisors by Michael Manns
• Investec Guinness Flight by Andrew Couch