rate worries haunt stocks

hi folk's

2 day/5 min chart,

dow still up over all






Rate worries haunt stocks
Major gauges retreat as concerns about the economy, inflation and interest rates spark a selloff.
By Jessica Seid, CNNMoney.com staff writer
June 22, 2006: 4:54 PM EDT


NEW YORK (CNNMoney.com) - Stocks floundered Thursday, erasing nearly all of the previous session's gains, as inflation fears took hold of investors once again.

The Dow Jones Industrial average (down 60.35 to 11,019.11, Charts) and the broader Standard & Poor's 500 index (down 6.60 to 1,245.60, Charts) both lost 0.5 percent. The tech-heavy Nasdaq composite (down 18.22 to 2,122.98, Charts) lost 0.9 percent.







Stocks pared some losses from earlier in the session after two key economic reports reignited concerns about the Fed's upcoming policy meeting next week.

The Conference Board said its index of Leading Economic Indicators slipped by 0.6 percent in May, a bigger drop than expected, suggesting the economy could weaken in coming months.

Earlier the government reported that new jobless claims rose by 11,000 to 308,000 last week. Though the increase was bigger than expected, new claims near the 300,000 level are still a sign of a tight job market.

The more important durable goods orders report is due out on Friday.

Fred Dickson, chief market analyst at D.A. Davidson & Co., predicted more volatility to come as traders wait on word from the Federal Reserve next week. "Traders are befuddled as to what to do until we get some more news from the Fed."

"We're watching the market bounce up and down in a narrow range. ...and tomorrow's going to be more of the same," Dickson said.

"Keep a bottle of Pepto-Bismol handy," Dickson advised.

On the move
Of the 30 stocks in the Dow, 24 fell and six rose.

Among the Dow's top losers, Johnson & Johnson (down $0.61 to $61.18, Charts) fell 1 percent.

Shares of the drugmaker and Boston Scientific (down $0.50 to $18.61, Charts) were both lower after The Wall Street Journal reported that some hospitals are cutting back on their drug-coated stents because of a risk of blood clots.

After the closing bell, Oracle (down $0.20 to $14.33, Charts) posted a higher quarterly profit, but shares of the software provider edged lower on Inet.

Contract electronics manufacturer Solectron (down $0.07 to $3.30, Charts) posted a profit for its fiscal third-quarter, reversing a year-ago loss and sending shares up 3 percent in after-hours trade.

Shares of Synnex (up $0.07 to $17.82, Charts) also rose 3 percent after hours after the computer hardware distributor said quarterly profit fell from a year earlier.

Rite Aid (down $0.35 to $4.20, Charts) sank close to 8 percent during regular trading hours after the drugstore operator said first-quarter profit fell.

Del Monte Foods (up $0.29 to $11.59, Charts) shares jumped 2.5 percent after the food company reported fiscal fourth-quarter profit tripled and announced a plan that included job cuts.

Jabil Circuit (down $0.69 to $24.79, Charts) tumbled almost 3 percent after the cell phone and computer component maker reported quarterly profit in line with a lowered forecast after the closing bell Wednesday, but announced job cuts and plant closings to boost earnings.

Also after Wednesday's closing bell, Bed Bath & Beyond (down $2.21 to $34.71, Charts) said fiscal first-quarter profit edged up, roughly in line with expectations, but Bear Stearns downgraded the home goods retailer to "peer perform" from "outperform" and shares sank 6 percent in afternoon trade.

Investment firms Blackstone Group and Kohlberg Kravis Roberts dropped out of the bidding for Univision Communications (down $1.04 to $32.80, Charts), sending shares of the nation's biggest Spanish-language broadcaster down another 3 percent.

Federated Department Stores (up $0.33 to $36.13, Charts) has agreed to sell its Lord & Taylor department-store chain to a private-equity firm and shopping-center developer for about $1.2 billion.

Lehman Brothers upgraded Netflix (up $0.50 to $27.67, Charts) to "overweight" from "equal weight," sending the video rental service up nearly 2 percent.

Goldman Sachs cut RealNetworks (down $1.11 to $9.72, Charts) to "underperform" from "in line," sending shares of the digital media company down over 10 percent.

Also dragging down the Nasdaq, Qualcomm (down $2.82 to $41.38, Charts) tumbled more than 6 percent after cellphone maker Nokia said it would stop making phones based on CDMA, a cellphone standard developed by the wireless technology company.

Market breadth was negative and volume was light. On the New York Stock Exchange, decliners topped advancers by a margin of two to one on volume of 1.4 billion shares. On the Nasdaq, losers beat winners by a margin of four to three as 1.7 billion shares changed hands.

In commodity markets, oil prices rose 51 cents to $70.84 a barrel on the New York Mercantile Exchange.

COMEX gold fell $5.60 to 585.40. Platinum, silver and copper were also lower.

Treasury prices sank, raising the yield on the benchmark 10-year note to 5.21 percent, a four-year high, from 5.15 percent late Wednesday.

The dollar rallied against the yen and the euro.

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Related: Can the Fed put the inflation genie back in the bottle?

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