(Reuters) – The New York Stock Exchange opened lower on Tuesday after data showing a bigger-than-expected rise in U.S. retail sales in July raised fears the Federal Reserve would hold interest rates at a high level for longer.
In early trading, the Dow Jones index lost 190.90 points, or -0.54% to 35,116.73 points and the broader Standard & Poor’s 500 fell 0.44% to 4,470.17 points.
The Nasdaq Composite lost 0.20% or -27.20 points to 13,761.128.
Retail sales in the United States rose 0.7% in July, against +0.4% expected on average by economists polled by Reuters, after rising 0.3% in June.
The likelihood of a pause in Fed increases at its September meeting fell to 86.5% from 89% before the data was released.
“Given that we are very vigilant about the Fed and what it will do in September, it is not surprising that the market reacts with nervousness,” said Peter Andersen, founder of Andersen Capital Management. in Boston.
“The retail sales figure could indicate that the Fed will continue to raise rates.”
Yields on 10-year US government bonds hit a 10-month high after the news at 4.274% before slowing down 2.5 basis points to 4.2090%. The yield on two-year bills, sensitive to changes in key rates, fell 1.7 basis points to 4.9459%.
In stocks, Home Depot gained 1.23% after reporting better-than-expected quarterly profit and announcing a $15 billion share buyback.
(Written by Kate Entringer)
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