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Stocks set a new low for 2004

Worry about rate hikes, Iraq drag the Dow below 10,000 By Mark Cotton, CBS.MarketWatch.com
Last Update: 5:08 PM ET May 10, 2004

NEW YORK (CBS.MW) -- The Dow Jones Industrial Average closed Monday at its lowest level this year amid a broad sell-off sparked by concerns about rising interest rates and the political fallout surrounding the U.S. occupation of Iraq.

The Dow ($INDU: news, chart) tumbled 127.32 points, or 1.3 percent, to 9,990.02, and at one point in late trading fell as low as 9,932.74. The last time the benchmark index closed below 10,000 was on Dec. 10, 2003, when it ended the session at 9,921.86.

The Nasdaq Composite ($COMPQ: news, chart) was off 21.89 points, or 1.1 percent, at 1,896.07, after falling to an intraday low of 1,880.32. The Philadelphia Semiconductor Index ($SOX: news, chart) ended up 0.4 percent, helping to limit losses on the tech-heavy Nasdaq.

The Standard & Poor's 500 Index ($SPX: news, chart) dropped 11.58 points, or 1.1 percent, to 1,087.12, while the Russell 2000 Index ($RUT: news, chart) of small-cap stocks fell 2 percent.

Casting a pall over the morning on Wall Street, Japan's blue-chip Nikkei average plunged more than 500 points, pressured by the specter of the Federal Reserve raising rates to 1.75 percent by the autumn from its current 46-year low of 1 percent.

"The markets were rattled by the global meltdown prior to the opening of the U.S. market," said Mike Holland, fund manager at the Holland Balanced Fund. "There was no serious attempt at changing the direction, with a weak afternoon rally fading.