Markets Right Now: Fed outlook on rates weighs on stocks

NEW YORK (AP) - The Latest on developments in financial markets (all times local):

4:00 p.m.

Stocks are closing lower on Wall Street as traders get used to the idea that the Federal Reserve may raise interest rates next month.

Industrial companies and bank stocks fell more than the rest of the market Thursday. Goldman Sachs dropped 3 percent and Boeing fell 2 percent, the biggest declines in the Dow Jones industrial average.

Wal-Mart bucked the downward trend and jumped almost 10 percent after reporting surprisingly strong sales and releasing an optimistic outlook. That comes in contrast to dour forecasts and results from many other retailers in recent weeks.

The Dow fell 91 points, or 0.5 percent, to 17,435. The Standard & Poor's 500 lost 7 points, or 0.4 percent, to 2,040. The Nasdaq composite gave up 26 points, or 0.6 percent, to 4,712.

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11:45 a.m.

Stocks are dropping as telephone and industrial companies continue to drag major indexes lower.

Some high-dividend stocks fell for a second day Thursday as investors braced themselves for the likelihood of an interest rate increase in June at the Federal Reserve's next policy meeting.

Verizon fell 2 percent and AT&T lost 1 percent.

Wal-Mart Stores bucked the downward trend and jumped 9 percent after reporting surprisingly strong sales and releasing an optimistic outlook. That comes in contrast to dour forecasts and results from many other retailers in recent weeks.

The Dow Jones industrial average fell 190 points, or 1.1 percent, to 17,335. The Standard & Poor's 500 lost 21 points, or 1 percent, to 2,026. The Nasdaq composite fell 58 points, or 1.2 percent, to 4,680.

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9:35 a.m.

Stocks are opening slightly lower on Wall Street as telephone companies and utilities continue to drag the markets lower.

High-dividend stocks fell for another day Thursday as investors braced themselves for the increased likelihood of an interest rate increase in June at the Federal Reserve's next policy meeting. Verizon fell 2 percent and AT&T lost 1 percent.

Wal-Mart Stores bucked the downward trend and jumped 8 percent after reporting surprisingly strong sales and releasing an optimistic outlook. That comes in contrast to dour forecasts and results from many other retailers in recent weeks.

The Dow Jones industrial average slipped 48 points, or 0.3 percent, to 17,479. The Standard & Poor's 500 lost 4 points, or 0.2 percent, to 2,042. The Nasdaq composite fell 5 points, or 0.1 percent, to 4,733.

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11:40 a.m.

European stock markets are trading lower after the Federal Reserve suggested that an interest rate increase was possible next month if the U.S. economic data continues to be strong.

That message caught many in the markets by surprise. A big impact was felt in the currency markets, where the dollar firmed as traders priced in a growing likelihood of a rate hike in June. Higher rates tend to support a currency.

Stocks have also taken a hit. In Europe, Germany's DAX is down 1.3 percent at 9,817 while the CAC-40 has fallen 0.9 percent to 4,279. The FTSE 100 index of leading British shares is down 1.4 percent at 6,073. U.S. stocks are poised for a lower opening too, with Dow futures and the broader S&P 500 futures down 0.3 percent.

Neil MacKinnon, global macro strategist at VTB Capital, says the danger for the Fed "is that 'flip-flops' in its message to the markets just ends up denting the Fed's credibility and contributes to unnecessary market volatility."