US stocks open lower on rate hike fears

New York, Aug 31 (IANS) US stocks opened lower on Monday as recent economic data fueled speculation that the Federal Reserve will begin raising interest rates from September.

With no major economic reports due out on Monday, investors are still sifting through the strong gross domestic product (GDP) report.

The US Commerce Department on Thursday revised up its estimate for GDP growth in the second quarter to 3.7 percent – much higher than the 0.6 percent growth in the first quarter.

Meanwhile, a separate report from the department shows that U.S. personal income in July increased 0.4 percent and personal consumption expenditures increased 0.3 percent after an upwardly revised 0.3 percent rise in June.

Federal Vice Chairman Stanley Fischer said Friday that it was too early to determine whether last week’s market turmoil would impact the likelihood of a rate hike next month.

He added in a Saturday speech that US inflation was likely to rebound, which allows for a gradual increase in rates.

US equities witnessed wild swings last week, with the Dow plummeting more than 1,000 points before reversing part of losses to end 588 points lower on Monday, as a rout in global markets rattled nervous investors.

On Friday, US stocks ended mixed after two-day market rally, as global financial volatility continued to weigh on Wall Street sentiment.

Shortly after the opening bell, the Dow Jones Industrial Average fell 88.26 points (0.53 percent), to 16,554.75. The S&P 500 lost 8.92 points (0.45 percent), to 1,979.95. The Nasdaq Composite Index was down 22.06 points (0.46 percent), to 4,806.27.

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