Interest rate fears lead to Dow slump

US investors succumbed again to interest rate fears today, sending stocks tumbling after the US government reported blistering job growth in April that far exceeded Wall Street’s expectations.

The Dow Jones industrial average skidded more than 120 points or 1.2%, to 10,117.34.

The jobs data gave further credence to predictions that the Federal Reserve would hike the benchmark lending rate by at least a quarter percentage point at its next meeting in June.

Many analysts expressed frustration that the market’s weeks-long anxiety over rates was distracting investors from a very positive economy and strong corporate earnings.

“Eventually, we’re going to have to come to the realisation that the reason rates are rising is because of solid economic growth,” said Chris Conkey, deputy chief investment officer at Evergreen Investments.

“The Fed has clearly indicated that they’re going to raise rates, and maybe that will let us start the transition into other opportunities.”

The Dow Jones industrial average plummeted 123.92, or 1.2%, to 10,117.34.

Declining issues outnumbered advancers by an impressive 8-to-1 margin on the New York Stock Exchange, where volume was moderate.

Broader stock indicators also slid. The Standard & Poor’s 500 index was down 15.30, or 1.4%, at 1,098.69, and the technology-laden Nasdaq composite index lost 19.78, or 1%, to 1,917.96.

For the week, the Dow lost 108.23, or 1.1%, the S&P 500 fell 8.61, or 0.8%, and the Nasdaq dropped 2.19, or 0.1%.

It was the second straight week of declines for all three major indexes, which hit their lowest levels since March 24.

The Russell 2000 index of smaller companies slid 14.53, or 2.6%, to 548.56.