New York, Sept. 22 (BNA): Stocks fell on Wall Street Thursday afternoon and the weekly losses increased for major indices as central banks around the world raised interest rates to fight inflation.
The S&P 500 was down 0.8% as of 12:07 p.m. ET. The Dow Jones Industrial Average fell 99 points, or 0.3 percent, to 30,087, and the Nasdaq fell 1.3 percent. Every major indicator is steadily on track for weekly losses.
The losses were broad and led by retailers, technology stocks and industrial companies. Starbucks shares fell 3.8% and Apple 1.2%, according to the Associated Press.
Small-cap stocks fell more than the broader market in a sign of investor concern about the economy. The Russell 2000 index fell 2.2%.
Bond yields rose. The two-year Treasury yield, which tends to follow expectations for the Fed’s action, rose significantly to 4.12% from 4.02% late Wednesday.
They are trading at their highest level since 2007. The yield on the 10-year Treasury, which influences mortgage rates, jumped to 3.68% from 3.51% late Wednesday.
Investors are concerned that the Fed may get bolder about interest rates, but if rates stabilize that won’t happen, said Barry Bannister, chief equity strategist at Stifel. He said that the implementation of this process may take more than a year.
Central banks in Europe and Asia raised rates a day after the Federal Reserve raised interest rates again and indicated that more was on the way.
The Bank of England raised its key interest rate by another half a percentage point. The Swiss central bank raised its benchmark lending rate by its largest margin to date, 0.75 percentage points, and said it could not rule out further increases. The central banks of Norway and the Philippines also raised interest rates.
The Fed and other central banks are raising interest rates to make borrowing more expensive. The goal is to slow economic growth enough to tame inflation, but not so much that economies slip into recession.
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