NEW YORK – U.S. stocks fell Thursday, as investors bet the Federal Reserve will keep raising interest rates even as economic growth shows signs of slowing.
The Dow Jones industrial average fell 60.35 points, or 0.54 percent, to end at 11,019.11. The Standard & Poor's 500 Index ) slipped 6.60 points, or 0.53 percent, to finish at 1,245.60. The Nasdaq Composite Index dropped 18.22 points, or 0.85 percent, to close at 2,122.98.
Dow component Johnson & Johnson (JNJ) slid as a report questioning the safety of some stents hurt shares of leading medical equipment suppliers.
Bed Bath & Beyond Inc. (BBBY), the largest U.S. home furnishings retailer, was among the Nasdaq's leading decliners after Bear Stearns downgraded the stock, citing lower-than-expected earnings.
Demand for stocks fell as an index of U.S. leading economic indicators slipped 0.6 percent in May, exceeding economists' forecast, a report from the Conference Board, a private research group, showed.
U.S. Treasury debt prices fell, with traders citing rumors that the Federal Reserve might raise interest rates by 50 basis points when it meets next week.
"Investors are just very uncertain about the economy and the Fed," said John Forelli, senior vice president of Independence Investment LLC, in Boston. "Selling will be concentrated on companies very vulnerable to economic cycles and consumer spending, such as retailers, materials and tech shares."
J&J's stock was among the biggest drags on the Dow and the S&P 500, falling 1 percent, or 61 cents, to $61.18 on the New York Stock Exchange. Boston Scientific Corp. (BSX) shares lost 2.6 percent, or 50 cents, to $18.61. The Wall Street Journal said hospitals are reducing the use of the products due to worry about blood clots.
In Nasdaq trading, shares of Bed Bath & Beyond fell 6 percent, or $2.21, to $34.71, after the Bear Stearns downgrade.
Bear Stearns also cut the price target for shares of Jabil Circuit Inc. (JBL) to $35 from $50. Shares of the company, which reduced a profit forecast Wednesday, slid 2.7 percent, or 69 cents, to $24.79 on the NYSE.
The heaviest weight on both the Nasdaq and the S&P 500 was the stock of Qualcomm Inc. (QCOM), down 6.4 percent, or $2.82, at $41.38 after Nokia , the world's biggest mobile phone maker, said it would stop making phones based on CDMA, a cell phone standard developed by Qualcomm.
Trading was moderate on the NYSE, with about 1.46 billion shares changing hands, below last year's daily average of 1.61 billion, while on Nasdaq, about 1.69 billion shares traded, below last year's daily average of 1.80 billion.
Declining stocks outnumbered advancing ones by a ratio of about 2 to 1 on the NYSE and by 17 to 12 on Nasdaq.