US stocks finish lower as Fed meets
In this Monday, Dec. 16, 2013, photo, specialist William Geier, left, works on the floor of the New York Stock Exchange. Investors took to the sidelines Tuesday, Dec. 17, 2013, a day ahead of a key policy decision from the US Federal Reserve that may see the central bank reduce its massive monetary stimulus. AP
NEW YORK—US stocks Tuesday closed lower as investors awaited Wednesday’s conclusion of a much-anticipated US Federal Reserve policy meeting.
The Dow Jones Industrial Average dipped 9.31 points (0.06 percent) to 15,875.26.
The broad-based S&P 500 fell 5.54 (0.31 percent) to 1,781.00, while the tech-rich Nasdaq Composite Index gave up 5.84 (0.14 percent) at 4,023.68.
“Investors are basically sitting on their hands,” said Sam Stovall, chief investment strategist of S&P Capital IQ.
“Yesterday we had an oversold rally,” Stovall said. “And now, investors really don’t want to chase that rally for fear that the Fed will do or say something that turns this market back down.”
The Fed’s Federal Open Market Committee Tuesday kicked off a two-day meeting that will debate whether economic conditions are strong enough to immediately scale back the $85 billion a month quantitative-easing program.
Analysts disagree on the likelihood of a taper, but some, including Stovall, expect the Fed to announce a modest reduction of about $10 billion to bond purchases.
Facebook rose 2.0 percent after beginning to experiment with video ads on news feeds this week, potentially unlocking a big revenue source.
Petroleum pipeline company Williams Companies jumped 4.3 percent after Corvex Management and Soroban Master Fund disclosed that they together had acquired 8.8 percent of the company and seek board representation. The effort is the latest example of shareholder activism in the oil patch.
Dow component Boeing increased 0.9 percent after announcing a $10 billion share buyback and a 50 percent dividend hike.
Fellow Dow member 3M rose 2.9 percent after announcing a 35 percent dividend increase. The company also forecast 2014 earnings of $7.30-$7.55 per share, compared with analyst expectations of $7.40.
Hewlett-Packard tacked on 3.5 percent after JPMorgan Chase upgraded the stock. The JPMorgan note said challenges facing HP are “easing” and that the PC outlook is “starting to improve,” Barron’s reported.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.84 percent from 2.88 percent Monday, while the 30-year declined to 3.87 percent from 3.90 percent. Bond prices and yields move inversely.
