Stocks Plunge On Rita, Rate Fears
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Stocks tumbled for the third straight day Wednesday on fear of rising interest rates and oil prices, as the fiercest hurricane in decades appeared headed for the Texas Gulf Coast.
Just a day after the Federal Reserve said it expects Hurricane Katrina to have only a temporary effect on the economy, Hurricane Rita was upgraded to a Category 5 hurricane, with sustained winds of 165 miles per hour, headed for the heart of U.S. oil production off the Texas coast.
The combination of rising interest rates from the Fed and higher oil prices and slower economic growth from Gulf storms were too much for investors, who sent stocks sharply lower for the third straight day.
fell 4% and Intel
edged higher after Merrill Lynch downgraded AMD on valuation concerns and raised Intel to "buy."
slipped ahead of its earnings due out after the close on Thursday. Analysts expect earnings of 14 cents a share on revenues of $2.94 billion, up 33% from the year-ago quarter. Palm
will also report Thursday night.
rose after the company lifted guidance.