Stocks Opened Sharply Lower amid Rate-hike Fears

U.S. stocks opened sharply lower on Tuesday amid fears that the Federal Reserve will begin raising interest rates this year. The Dow Jones Industrial Average lately dropped 200.24 points, or 1.11%, to 17,795.48. The S&P 500 fell 19.34 points, or 0.93%, to 2,060.09. The Nasdaq Composite was down 53.37 points, or 1.08%, to 4,889.07.

Federal Reserve Chair Janet Yellen should support a higher value for the dollar because, contrary to popular belief, it’s in the best interest of the United States to have a stronger currency. Policies that weaken the dollar, like those the United States has followed since the early 1960s, may help the economy, and the labor markets in the short-run, but over the longer-run, more research is indicating that these policies can be
harmful to economic productivity and consequently economic growth because the economy becomes less competitive.

Gold fell almost 1 percent to a three-month low on Tuesday as the dollar rose to a near 12-year peak versus the euro on renewed expectations of a mid-year hike in U.S. interest rates. Spot gold dropped to its lowest since Dec. 1 at $1,155.60 an ounce in early trade, and was down 0.4 percent at $1,161.90 by 1048 GMT.

Credit Suisse Group said Tuesday chief executive Brady Dougan, currently one of the longest serving investment bank CEOs, will step down at the end of June after an eight-run on the job and be replaced by London-based insurance executive Tidjane Thiam.

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