Wall Street retreats amid inflations fears

NEW YORK: US stocks started the week in the red, pulling back early Monday as continued inflation fears overwhelmed good news about the economic recovery.

But analysts said the concerns, including Boeing's latest setback, were a good excuse for investors to take profits out of high-flying stocks.

On the plus side, the US Congress is moving towards approving a huge $1.9 trillion economic stimulus package. But Treasury markets reflect fears that borrowing rates may rise sooner than expected, despite repeated assurances from the Federal Reserve.

"The skittishness toward a rising interest rate environment seems to be countering the bullish backdrop of extremely accommodative global monetary and fiscal policies," Schwab analysts said.

About 30 minutes into the trading session, the Dow Jones Industrial Average had dropped 0.3 percent to 31,387.96.

The broad-based S&P 500 fell about 0.5 percent to 3,888.34, while the tech-rich Nasdaq Composite Index was the big loser dropping 1.0 percent to 13,734.06.

Markets will be watching Fed Chair Jerome Powell's two days of testimony in Congress on Tuesday and Wednesday, where he is likely to repeat his oft-stated message that the central bank has no plans to raise the benchmark interest rate until employment has recovered and inflation begins to rise.

Boeing dropped 1.1 percent after an engine failure in one of its 777 aircraft forced an emergency landing of a flight out of Denver, and prompted grounding of 128 planes with the same Pratt & Whitney engine.