(Corrects reason for McDonald's shares falling and removes reference to warning on profit impact of forex hit)
* McDonald's shares fall on slowing May sales
* Investors eye rising interest rates
* Indexes down: S&P 500 1.2 pct; Dow 1.2, Nasdaq 1.6
* For up-to-the-minute market news click [STXNEWS/US] (Updates to mid-morning)
By Edward Krudy
NEW YORK, June 8 (Reuters) - U.S. stocks slid on Monday after McDonald's Corp posted lighter-than-expected May sales and investors worried that rising interest rates may hamper a recovery.
With the market rallying for three months, investors are increasingly looking for more concrete evidence of an improving economy to sustain the advance.
Additionally, a continued rise in bond yields could be another headwind for stocks since rising interest rates may boost borrowing costs for consumers and businesses.
The Dow Jones industrial average <.DJI> fell 101.80 points, or 1.16 percent, at 8,661.71. The Standard & Poor's 500 Index <.SPX> lost 11.46 points, or 1.22 percent, at 928.63. The Nasdaq Composite Index <.IXIC> dropped 30.00 points, or 1.62 percent, at 1,819.42.
"In general, the feeling among traders is that we're due for a correction," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.
Regarding interest rates, Ghriskey said: "As rates rise, that increase gets passed on."
McDonald's
That was significantly slower than the 6.1 percent growth in April. For more details see [ID:N08309089].
Analysts said that the average of estimates was calling for May growth of around 3.6 percent.
Other drags were big manufacturers and natural resource
companies that have had a strong run-up in recent weeks.
Freeport-McMoRan Copper & Gold Inc
U.S. government securities prices were mixed as the view the recession will end later this year and the Federal Reserve could raise interest rates hurt shorter-dated Treasuries. (Reporting by Edward Krudy; editing by Jeffrey Benkoe)