techs pace stock retreat

Techs pace stock retreat
Major gauges decline anew on worries about higher oil prices, inflationary signs in morning's economic news.
August 1 2006: 9:54 AM EDT


NEW YORK (CNNMoney.com) -- Surging oil prices and revived worries about interest rates were among the factors dragging on stocks Tuesday morning.

The Dow Jones industrial average (down 28.98 to 11,156.70, Charts) lost about 0.4 percent in the early going. The broader Standard & Poor's 500 (down 4.59 to 1,272.07, Charts) index lost 0.5 percent and the tech-heavy Nasdaq composite (down 16.33 to 2,075.14, Charts) lost nearly 1 percent.

Stocks fell Monday - after the previous week's big rally - on worries about oil prices and how much longer the Federal Reserve will keep raising interest rates.

Such concerns remained front and center Tuesday, as investors focused on the inflationary signs in the morning's economic news and geared up for more economic news due shortly.

June personal income rose 0.6 percent, up from 0.4 percent in May and in line with estimates. June Personal spending rose 0.4 percent, down from 0.6 percent in May, but in line with estimates.

However, the report's core PCE deflator - an inflation measure closely watched by the Federal Reserve - rose by 0.2 percent in June and up 2.4 percent year-over-year.

A read on construction spending was due around 10 a.m. ET. At the same time, the Institute for Supply Management releases its manufacturing index.

Treasury prices slipped, boosting the yield on the benchmark 10-year note to 5 percent from 4.98 percent late Monday. Bond prices and yields move in opposite directions.

U.S. light crude oil for September delivery gained 30 cents to $74.70 a barrel in electronic trading.

COMEX gold for December delivery rose $2.70 to $649.50 an ounce.

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