Stocks Fall as Bond Slide Unnerves

Tue July 29, 2003 03:23 PM ET
By Elizabeth Lazarowitz
NEW YORK (Reuters) - U.S. stocks dropped in volatile late afternoon trading on Tuesday as bond prices slumped, feeding concerns about the economy's health.

But the market was off its worst levels of the day as Wall Street investors put soft economic data behind them.

Treasury prices extended their recent declines, pushing the yield on the benchmark 10-year note to its highest level in nearly a year. Investors worry that sharp gains in interest rates will hike borrowing costs and derail the fragile U.S. economic recovery.

"I'm a little bit baffled and concerned to see this kind of a move" in bonds, said Donna Van Vlack, director of trading at Brandywine Asset Management.

Stocks fell sharply during morning trading after the Conference Board said U.S. consumer confidence for July fell to 76.6 from 83.5 in June. The forecast was for a gain in July to a reading of 85.0.