Stocks drop on rate hike jitters after investors increased their bets that the Fed would raise rates later this year. Bobbi Rebell reports.
Strong economic data rattled investors, dragging U.S. stocks lower. Consumer prices in April notched their biggest gain in three years, and housing starts spurted higher. That triggered investor concerns that the Fed would likely hike interest rates this year. Christian Magoon of Amplify Investments: (SOUNDBITE) CHRISTIAN MAGOON, CEO, AMPLIFY INVESTMENTS, (ENGLISH) SAYING: "They believe the Fed is starting to see a little bit of a - I don't want to say frothy conditions - but growing kind of economic recovery. I think, they are justified in being concerned that the Fed may pull the trigger sooner than later." Who says consumers aren't spending? Home Depot lifted its profit forecast for the full year; so too, did Children's Place and TJX, the owner of the off-price apparel chains, T.J. Maxx and Marshalls. Consumers just aren't shopping at department stores like Macy's and Kohl's. Lending Club's shares dropped further. The online peer-to-peer lender received a subpoena as part of a Justice Department probe. It says it is cooperating with authorities. The stock tanked last week after it disclosed it had sold Jefferies loans that its employees knew didn't meet the investment bank's instructions. In Europe, stocks closed flat. A gain in telecom stocks ws offset by a drop in consumer stocks.