Wall Street falls on concerns over rate hike, European economic recovery

Wall Street fell on Wednesday as concerns over interest rate hike and the strength of economic recovery in European countries weighed on the market.

Major indexes followed European stocks lower after data showed Europe's economy unexpectedly stagnated in the fourth quarter.

The European Union's statistics office in Luxembourg said on Wednesday that gross domestic product in the 16-nation euro region remained unchanged in the final three months compared with the third quarter, weaker than its previous report.

The markets fell further after Federal Reserve official said that the Fed should start boosting interest rates soon.

Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, in a speech in New Mexico raised concerns about leaving rates at record lows for too long. He suggested the Fed soon start moving its key rate toward 1 percent.

Also on Wednesday, Federal Reserve Chairman Ben Bernanke said that problems in the housing market and high unemployment are the biggest economic challenges the U.S. faces.

After suffering through the worst recession since the 1930s, the economy seems to have stabilized and is growing again, Bernanke said, warning that "We are far from being out of the woods."

Meanwhile, a bigger-than-expected rise in oil inventories put pressures on energy shares.

According to U.S. Energy Information Administration, crude inventories rose by 2.0 million barrels for the week ended April 2, more than analysts had anticipated.

General Motors Co, which received 50 billion U.S. dollars of U. S. taxpayer support for the restructuring, posted a net loss for 2009, but said it was possible to make a profit this year.

GM reported a 4.3-billion-dollar 2009 net loss covering the period from its emergence from bankruptcy in July through the end of the year.

The automaker said it had repaid 2.8 billion dollars of its loans from the U.S. Treasury and Export Development Canada by the end of March and planned to repay the remaining 5.6 billion dollars by June.

The Dow Jones industrial average dropped 72.47, or 0.66 percent, to 10,897.52. The Standard & Poor's 500 index fell 6.99, or 0.59 percent, to 1,182.44 and the Nasdaq was down 5.65, or 0.23 percent, to 2,431.16.

Source: Xinhua