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US stocks close lower as Fed meets

Aug 01 2012 08:41 AFP

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New York - US stocks closed lower for a second straight day on Tuesday as investors awaited the outcome of the Federal Reserve's two-day monetary policy meeting.

The Dow Jones Industrial Average closed at 13,008.68, down 64.33 points.

The S&P 500 fell 5.98 points to 1,379.32 and the tech-rich Nasdaq dropped 6.32 to 2,939.52.

"Tomorrow's impending Federal Reserve statement at the conclusion of its monetary policy meeting, and what it may hold, appeared to be the day's focus," Charles Schwab & Co. analysts said.

Dick Green at Briefing.com noted that most economists expect the central bank's Federal Open Market Committee (FOMC) will hold off on any additional easing measures until at least September. The FOMC statement is expected Wednesday at 2:15 pm (18:15 GMT).

"Tomorrow is likely to be volatile," Green said.

Traders had a batch of economic data to weigh, including numbers on consumer confidence, personal incomes and spending, and home prices.

The Commerce Department reported June personal spending, the main driver of the US economy, was essentially flat, while incomes rose 0.5%, slightly better than expected.

Consumer confidence improved slightly in July after four months of declines as sentiment lags around historically low levels, according to a closely watched private survey released by the Conference Board.

And home prices fell less than anticipated in May: The S&P/Case-Shiller's 20-city index fell 0.7% from a year ago. On a monthly basis, average home prices rose by 2.2% for a second straight month.

Pfizer led the Dow gainers, up 1.4%, after reporting a 25% leap in second-quarter profit, beating Wall Street estimates.

The worst Dow laggard was do-it-yourself chain Home Depot, down 2.0%.

Seagate Technology lose 1.4% on the Nasdaq. The hard-disk drive firm reported fiscal fourth-quarter earnings that missed expectations but revenue that missed.

Online retailer Amazon fell 1.2%.

Apple bounced 2.6% higher on rumors that it will come out with the iPhone 5 on September 12.

On Monday, the Dow and S&P 500 drifted lower, ending essentially flat, and the Nasdaq shed 0.4% as investors treaded in place ahead of the Fed meeting.

Bond prices rose. The 10-year Treasury yield slipped to 1.49% from 1.50% on Monday, while the 30-year was unchanged at 2.58%. Bond yields move inversely to prices.

us federal reserve  |  wall street  |  markets

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