Fin24

US stocks fall ahead of Fed talks

2012-07-31 08:00

New York - US stocks closed in the red on Monday as Wall Street hoped for US Federal Reserve and European Central Bank stimulus action this week and awaited a report on the July jobs market.

After two big euro-driven rallies late last week, the major indices struggled to maintain modest gains in markets lacking a catalyst.

The Dow Jones Industrial Average finished the session at 13,073.01, drifting down 2.65 points.

The S&P 500 slipped 0.67 point to 1,385.30 and the Nasdaq shed 12.25 to 2,945.84.

"The market focus is on squarely on the Fed's policy meeting on Wednesday and a European Central Bank meeting on Thursday," said Dick Green at Briefing.com.

"Equity market participants are hoping for central bank action that will decrease economic risk, increase liquidity, and in theory therefore boost stock prices."

The Fed's Federal Open Market Committee opens a two-day meeting Tuesday. The government reported Friday the economy slowed in the second quarter, to growth of 1.5% from 2.0% in the first quarter.

Investors also were looking ahead to the government's July jobs report on Friday, expected to show unemployment remained stuck at 8.2% from June and weak job growth.

There were no major US economic releases on the calendar.

Financials were under pressure. JPMorgan Chase led the Dow lower, tumbling 2.3%, and Bank of America and Citigroup each fell 0.6%.

Fellow Dow member Hewlett-Packard shed 1.8%.

Coca-Cola was the biggest blue-chip gainer, up 1.4%.

Engineering merger news was in focus. Energy infrastructure-focused Chicago Bridge & Iron has agreed to acquire The Shaw Group, a global services provider, in a $3bn deal. CBI shares plunged 14.2% and Shaw soared 55.5%.

Dow member AT&T edged up 0.8% after announcing late Friday it would repurchase up to 300 shares, representing about 5.0% of its outstanding shares outstanding.

Apple added 1.7%. Jury selection began in a blockbuster patent trial pitting the California technology titan against South Korea's Samsung.

Boeing dropped 0.9% after reporting an "engine issue" hit a test flight of the 787 Dreamliner in South Carolina on Saturday.

US stocks closed out last week with two days of rallies that left the Dow above 13 000 on Friday for the first time since May.

Bond prices leaped. The 10-year Treasury yield dropped to 1.50% from 1.56% on Friday, while the 30-year fell to 2.58% from 2.64%. Bond yields move inversely to prices.