PRICES plunged on Wall Street as rising bond market, yields and strong economic, statistics incited fears that the Federal Reserve would again push interest rates higher.

Stock prices were mixed in early trading, but after the Treasury's 30-year bond broke through 7 per cent, a level feared by stock and bond investors, the Dow Jones industrial average fell sharply.

The Dow closed off 140.11 at 6,740.59, after being down more than 216 points. The markets were nervous about another interest rate increase, although many economists have predicted that Tuesday's decision by the Fed to raise short-term interest rates would be the first of several increases.

Declining issues outnumbered advances by more than three to one on the New York Stock Exchange, with 633 up, 2,025 down and 680 unchanged. NYSE volume totalled 475.93 million shares. The NYSE's composite index fell 7.94 to 407.43.