SCOTT SIMON, HOST:
Stock prices took a beating yesterday. The Dow Jones Industrial Average fell 666 points, losing 2-and-a-half percent of its value. Bond prices have fallen at their worst levels in four years. As NPR's Jim Zarroli reports, rising interest rates have thrown a scare into the market.
JIM ZARROLI, BYLINE: The stock market has been rising for so long, it's easy to forget it can have bad days, as well. Yesterday was a reminder that what goes up can come down. The January jobs report came out, and it showed pretty solid job gains. The unemployment rate remained at a very low 4.1 percent. What spooked investors was a big jump in average hourly wages. That's good news for workers who have had to endure anemic wage growth for years. But the increase was a sign that inflation is becoming more of a threat, and investors are worried that the Federal Reserve will increase rates faster than it already is.
It had already been a bad week in the stock market, and the inflation scare just made things worse. Bond rates shot up with the yield on the 10-year Treasury note above 2.8 percent. That was its highest level since 2014. And stocks fell in response. The Standard & Poor's 500 Index fell 2.1 percent. All in all, it turned out to be the worst week for the Dow since January 2016. But stocks have been climbing for a long time, and even with yesterday's drop, prices are still up for the year. Jim Zarroli, NPR News, New York.
(SOUNDBITE OF BROKE FOR FREE'S "HIGH HOPES") Transcript provided by NPR, Copyright NPR.
