Stocks Slide as Greenspan Ignites Rate Hike Fears

Updated from 4:08 p.m. EDT

The Dow and the Nasdaq plummeted to their lowest closing level in nearly a month Tuesday after investors interpreted testimony from Federal Reserve Chairman Alan Greenspan as a signal that the economy is one step closer to interest rate hikes.

The Dow Jones Industrial Average dropped 123.35 points, or 1.18%, to 10,314.50 after being positive for most of the day. The S&P 500 lost 17.73 points, or 1.56%, to 1118.09, and the Nasdaq Composite was off 41.80 points, or 2.07%, to 1978.63. The 10-year Treasury note went from flat to trade down 15/32 in price, yielding 4.45%, while the dollar surged against the euro and the yen.

The Dow's loss was moderated somewhat by the performance of General Motors(GM Quote), which rose 3.5% on better-than-expected first-quarter earnings. But 28 of the Dow's 30 components finished lower. ...