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Monday 31st of May 2010
May 12, 2006    

Wall Street drops on rate hike concerns

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by Elaine Frei

By the middle of the trading day on Friday, New York equities markets seemed poised to notch losses for both the day and the week after sell-offs in the wake of another hike in interest rates on Wednesday. Investors were apparently worried after comments from Federal Reserve chairman Ben Bernanke that seemed to indicate more rate hikes to come.

At mid-session on Friday the Dow Jones Industrial Average was down 0.4 percent on the day so far and 1 percent for the week to 11,458.47. The Nasdaq Composite had dropped 0.7 percent to noon and 3.6 percent on the week to 2,257.68. Meanwhile, the S&P 500 had fallen 0.4 percent so far for the day and 2 percent during the week to 1,299.83.

The semiconductor sector was down over the week. Intel managed to avoid the worst of the declines after it announced that it will spin off its flash-memory division, but it still dropped 1 percent during the week. Losses elsewhere were greater, with Micron down 6.7 percent to $15.90 and Advanced Micro Devices osing 7.1 percent to $31.97.

Other computer-related stocks fell as well. Cisco Systems lost 6 percent on the week to $20.44 on worse than expected quarterly results. Dell also reported that its profits would be lower in the quarter, finishing the week 4.8 percent lower at $24.45 despite a gain of 2.9 percent on Monday.

Ethanol maker Archer Daniels Midland saw gains on the week, with shares up 9.5 percent to $44.58. This took its advances to 25 percent since the end of April and 87 percent since the beginning of the year.

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