Dow falls 146.98
on rate fears

NEW YORK -- The Dow Jones industrial average sank as much as 220 points today amid fears the Federal Reserve is leaning toward a boost in interest rates to slow the economy and protect against inflation.

But the blue-chip index managed to recover some of its losses by day's end, finishing the trading session day with a 146.98-point drop to close at 8,917.64. It was the first time in two weeks that the Dow closed below 9,000.

Decliners led advancers by nearly an 8-to-1 margin on the New York Stock Exchange, with 332 up, 2,873 down and 310 unchanged. NYSE volume was 685 million shares vs. 632.28 million Friday.

Broad-market stock measures also suffered heavy damage. The Standard & Poor's 500 list fell 21.36 to 1,086.54, and the NYSE composite index fell 11.42 to 563.05.

The Nasdaq composite index fell 48.65 points, or 2.6 percent, to close at 1,820.31 in its third biggest point loss ever. The American Stock Exchange composite index dropped 12.86 to 729 and the Russell 2000 lost 11.82 to end at 468.50.

The price of the Treasury's main 30-year bond was down 1 19/32 points, or $15.94 per $1,000 in face value, by late afternoon, while its yield climbed to 6.06 percent from 5.94 percent late Friday. Prices and yields move in opposite directions.

Today's stock selloff was triggered by a report in the Wall Street Journal saying Fed officials agreed at a March 31 meeting that an increase in the central bank's key lending rates is more likely than a decrease.