Dow falls below 11,000; dollar up

NEW YORK - A stronger dollar and a surprise interest rate hike in China that may slow that country's economy helped push stocks sharply lower Tuesday.

The Dow Jones industrial average fell below 11,000 for the first time in a little more than a week, reversing a streak that had sent the index up nearly 8 percent for the year.

The announcement that China, whose rapid growth has helped pull the global economy along, raised a key interest rate to fight inflation sent U.S. stocks lower.

Disappointing news from Apple Inc. and IBM Corp. pushed the technology-heavy Nasdaq down about 2 percent. Both companies beat earnings forecasts when they reported results late Monday, but each delivered news that investors didn't like. Apple Inc. didn't sell as many iPads as analysts had hoped and a measure of profitability was lower than expected. IBM Corp.'s outsourcing business didn't do as well analysts predicted.

Shares of Apple fell 2.6 percent, to $309.49. Apple's shares have gained 9.1 percent this quarter.

The Dow Jones industrial average fell 165.07, or 1.5 percent, to 10,978.62. Standard & Poor's 500 index fell 18.81, or 1.6 percent, to 1,165.90, while the Nasdaq composite index fell 43.71, or 1.8 percent, to 2,436.95.

The dollar rose 1.7 percent against a basket of currencies, while gold fell 2 percent.

The strengthening dollar led to a broad sell-off of commodities. That dragged down stocks of companies in the energy and materials sectors of the Standard and Poor's 500, which were both down more than 2 percent.

For weeks, traders have been anticipating that the Federal Reserve will expand a program to buy bonds in hopes of encouraging spending. That has led many investors to buy stocks despite questions about the strength of the economic recovery.

Shares of Bank of America Corp. fell 54 cents, or 4.38 percent, after the company reported a loss because of a onetime charge tied to credit and debit card reform legislation passed this year.

Goldman Sachs Group, Inc., which reported results before the bell, earned $1.74 billion, or $2.98 a share, much higher than the $2.32 per share analysts predicted. Shares rose $3.02, or 1.9 percent.