Wall Street dips on Fed's Bullard comments on interest rates
By Angela Moon NEW YORK (Reuters) - U.S. stocks fell on Thursday following comments from a top Federal Reserve official that interest rate increases should come sooner rather than later. St. Louis Fed President James Bullard said the U.S. jobless rate will fall below 6 percent and inflation looks likely to rise back to 2 percent later this year, putting the economy closer to normal than most realize. Bullard is non-voting member of the FOMC. "You are basically going to be near normal on both dimensions basically later this year," Bullard said in an interview with Fox Business Network. "That's shocking, and I don't think markets, and I'm not sure policymakers, have really digested that that's where we are." Bullard reiterated his belief that raising rates by the end of the first quarter of 2015 will be appropriate. "I think the market was a bit spooked by (Bullard's) comments on inflation but it's also almost the end of the month, end of the quarter, so there's going to be more volatility as portfolio managers adjust positions," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. The Dow Jones industrial average fell 88.81 points or 0.53 percent, to 16,778.7, the S&P 500 lost 9.72 points or 0.5 percent, to 1,949.81 and the Nasdaq Composite dropped 20.92 points or 0.48 percent, to 4,358.84. Shares of the wearable sports camera maker GoPro opened at $28.65 in their market debut, above its IPO price of $24. The stock was up 25 percent at $30 less than 10 minutes into trading. Financial stocks were among the day's top decliners after New York State's attorney general filed a securities fraud lawsuit against Barclays, accusing the British bank of giving an unfair edge in the United States to high-frequency trading clients. U.S.-listed shares of Barclays fell 7.3 percent to $14.57. Other European banks were also hit, with U.S.-listed shares of UBS AG down 2.5 percent to $18.45 and Credit Suisse off 4.1 percent at $28.14. Alcoa Inc shares rose 3.1 percent to $15.01. The company agreed to buy aircraft parts maker Firth Rixson from private equity firm Oak Hill Capital Partners for $2.85 billion in cash and stock. Market reaction was muted to data that showed consumer spending rose less than expected in May, likely held back by weak healthcare spending, which could prompt economists to temper their second-quarter growth estimates. In a separate report, the Labor Department said new applications for state unemployment benefits slipped 2,000 to a seasonally adjusted 312,000 for the week ended June 21. (Reporting by Angela Moon; Editing by Chizu Nomiyama and Nick Zieminski)
