US stocks fall on worries of higher Fed rates

NEW YORK (AFP) - Wall Street stocks finished lower on Tuesday after positive economic data lifted speculation the US Federal Reserve could move more quickly to raise interest rates.

The Dow Jones Industrial Average fell 104.90 points (0.58 per cent) to 18,011.14.

The broad-based S&P 500 fell 12.92 (0.61 per cent) to 2,091.50, while the tech-rich Nasdaq Composite Index dropped 16.25 (0.32 per cent) to 4,994.73.

Data showed sales of new single-family homes surged in February to a seven-year high, while consumer prices rose for the first time in four months.

The new economic data make a faster rate hike by the Fed "a little bit more likely," said Chris Low, chief economist at FTN Financial.

Sam Stovall, chief investment strategist at S&P Capital IQ, said investors have also begun to focus on first-quarter earnings. The energy sector is forecast to report declining earnings and other sectors are also expected to be weak, he said.

"The concern is that valuations are rich right now," Stovall said.

Despite the drop on the Nasdaq, some prominent technology companies rose. Facebook gained 1 per cent, Netflix advanced 3.1 per cent and Twitter jumped 6.2 per cent.

Google rose 2 per cent on news it hired Morgan Stanley chief financial officer Ruth Porat to serve in the same post at the technology giant.

Morgan Stanley, which promoted Jonathan Pruzan from its investment banking segment as chief financial officer, dipped 0.2 per cent.

Whiting Petroleum sank 19.5 per cent to US$30.91 after it announced it was selling 35 million shares for US$30 per share. The shale producer also announced terms for a bond offering to raise US$1 billion (S$1.3 billion).

Freeport-McMoRan, a metals and petroleum producer, fell 0.8 per cent after slashing its dividend to 5 cents per share from 31 cents.

Spicemaker McCormick rose 2.6 per cent as first-quarter earnings translated into 70 cents per share, six cents above analyst expectations.

Bond prices rose. The yield on the 10-year US Treasury fell to 1.87 per cent from 1.91 per cent Monday, while the 30-year slid to 2.46 per cent from 2.51 per cent Monday. Bond prices and yields move inversely.