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U.S. stocks decline on rate hike fears

Xinhua, September 1, 2015 Adjust font size:

U.S. stocks traded lower in the morning session on Monday, as recent economic data fuel speculations that the Federal Reserve will begin raising interest rates as from September.

By midday, the Dow Jones Industrial Average decreased 42.53 points, or 0.26 percent, to 16,600.48. The S&P 500 moved down 6.71 points, or 0.34 percent, to 1,982.16. The Nasdaq Composite Index fell 13.44 points, or 0.28 percent, to 4,814.88.

Investors are still sifting through the strong gross domestic product (GDP) report released on Thursday. The U.S. Commerce Department revised up its estimate for GDP growth in the second quarter to 3.7 percent, which is much higher than the 0.6-percent growth in the first quarter.

A separate report from the department shows that U.S. personal income in July increased 0.4 percent and personal consumption expenditures increased 0.3 percent after an upwardly revised 0.3 percent rise in June.

Federal Vice Chairman Stanley Fischer said Friday that it was too early to determine whether last week's market turmoil would impact the likelihood of a rate hike next month.

He added in a Saturday speech that U.S. inflation was likely to rebound, which allows for a gradual increase in rates.

Meanwhile, the Chicago Business Barometer held on to most of July's gain, falling just a fraction to 54.4 in August from 54.7 in July, according to the ISM-Chicago Business Survey Monday.

U.S. equities witnessed wild swings last week, with the Dow plummeting more than 1,000 points before reversing part of losses to end 588 points lower on Monday, as a rout in global markets rattled nervous investors.

On Friday, U.S. stocks ended mixed after two-day market rally, as global financial volatility continued to weigh on Wall Street sentiment.

Overseas, Chinese shares saw a weak performance on Monday, with the benchmark Shanghai Composite Index dipping 0.82 percent to finish at 3,205.99 points, as the government intensifies efforts to crack down on market manipulation. Endit