NEW YORK (AP) _ The Dow Jones industrial average sank more than 220 points today amid fears the Federal Reserve is now leaning toward a boost in interest rates to slow the economy and protect against inflation.

But the blue-chip index managed to recover some of its losses by day's end, finishing the trading session day with nearly a 147-point drop. It was the first time in two weeks that the Dow closed below 9,000.

Broad-market stock measures also suffered heavy damage. The Nasdaq composite index, down nearly 3 percent, hit its third biggest point loss ever.

The selloff was triggered by a report in The Wall Street Journal saying Fed officials agreed at a March 31 meeting that an increase in the central bank's key lending rates is more likely than a decrease.

The prospect of higher rates rattled the bond market, where the yield on the 30-year Treasury _ a key determinant of borrowing costs for businesses and consumers _ jumped above 6 percent for the first time since early March.

Late last year, the Fed had hinted that the drag of the economic crisis in Asia might even justify a cut in rates to stimulate the U.S. economy.

But with the Asian backdrop showing signs of stability, the Journal said, the surprising resilience of the U.S. economy is now being viewed as an inflationary risk at the Fed. In another demonstration of that economic vigor, a realtors group reported today that sales of existing homes jumped 2.5 percent in March to a new record.

Only four of the 30 Dow components finished today higher. Among the biggest losers were Merck, J.P. Morgan, Goodyear and IBM.

Overseas, Tokyo's Nikkei stock average fell 2.3 percent, the Frankfurt's DAX index fell 1.1 percent and London's FT-SE 100 fell 2.4 percent.