U.S. Stocks Mostly Lower With Investors Cautious Ahead Of Fed
NEW YORK (MarketWatch) -- U.S. stocks eased on Wednesday, with investors on the defensive before the Federal Reserve's interest-rate decision later in the day, and as a bleak outlook from Internet-search giant Yahoo Inc. weighed on technology stocks.
"The pundits continue to debate whether we get" a quarter-percentage-point or half-point cut in the federal-funds rate. "There is a consensus that the market sells off either way," said Elliot Spar, option/market strategist at Stifel Nicolaus & Co. .
The Dow Jones Industrial Average fell 33.2 points to 12,447.1, with 21 of its 30 components trading lower. Merck & Co. was down the most, 4.2%, after the pharmaceutical company reported fourth-quarter losses of $1.63 billion, pegged in part to its Vioxx lawsuit settlement and restructuring charges.
Another blue chip, Boeing Co., saw its shares edge higher, recently by 2.1%, after it reported fourth-quarter earnings climbed 4%. .
Early economic indicators mostly bolstered the case for the Fed to cut half a point, with the government reporting U.S. economic growth slowed sharply in the fourth quarter. .
Conversely, the ADP employment report found the private sector added 130,000 jobs this month, nearly twice the 70,000 forecast by economists. .
Richard Hoey, analyst at Dreyfus Corp., says a divided Fed will trim the benchmark rate another half point. .
The S&P 500 declined 2.66 points to 1,359.64, while the technology-laden Nasdaq Composite gained 0.74 point to 2,358.80.
Shares of Yahoo were down 8.8% on the heels of its quarterly results and downgrades by several brokerages. .
Crude-oil futures climbed above $92 a barrel, with the contract for March delivery rising 6 cents to $91.70. .
Elsewhere on the New York Mercantile Exchange, gold for April delivery fell $4.30 to $925.5 an ounce. .
Volume surpassed 317 million shares on the New York Stock Exchange and neared 534 million on the Nasdaq. Declining stocks ran just ahead of advancing issues on both exchanges.
Other fourth-quarter earnings reports included a 6.3% profit decline at Kraft Foods Inc., with the world's second-largest foods producer attributing the drop to higher costs. .
Shares of E-Trade Financial Corp. climbed more than 10%, rallying as several insiders said they had recently bought shares of the troubled financial services company. .
In Europe, two large banks disclosed fresh troubles stemming from the U.S. housing slump, with Swiss banking giant UBS extending its latest write-down to $14 billion and France's BNP Paribas saying its quarterly profit will slide more than 40%. .
In Asia, several markets surrendered early gains to end in the red. .
By Kate Gibson