NEW YORK (AP) — Surging gold and energy prices dragged stocks lower yesterday as inflation fears curbed Wall Street’s enthusiasm over solid first-quarter earnings from financial services firm Citigroup Inc.
Although Citigroup’s upbeat results fed optimism about corporate earnings for the latest quarter, investors again focused on inflation and interest rates after comments from Federal Reserve Bank of Chicago President Michael Moskow indicated he felt the central bank must remain “vigilant” with its policy of boosting rates to stem price increases.
Without new data to gauge the economy’s health and only a few earnings reports, Wall Street turned its attention to the commodities markets, where oil prices topped $70 a barrel and gold lingered at a 25-year high.
At the close of trading, the Dow Jones Industrial Average dropped 63.87, or 0.57 percent, to 11,073.78, after opening the day in positive territory. The Dow is at its lowest level since closing at 10,972.28 on March 9.
The Standard & Poor’s 500 Index fell 3.79, or 0.29 percent, to 1,285.33, and the Nasdaq Composite Index sank 14.95, or 0.64 percent, to 2,311.16.
Bonds rebounded from last week’s slide, with the yield on the 10-year Treasury note slipping to 5.01 percent from 5.05 percent late Thursday. The dollar was mixed against other major currencies, and gold prices soared past $600 an ounce.
The Federal Reserve’s Empire State manufacturing index — a measure of industrial activity in the New York region — dropped by almost half to 15.8 for April,