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US stocks end lower ahead of Fed meeting
Source: Agencies |
September 11, 2012, Tuesday
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STOCKS ended lower on Wall Street as troubling economic news from China and the US outweighed optimism about more stimulus from the Federal Reserve.
The Dow Jones industrial average fell 52.35 points to close at 13,254.29 yesterday. The Standard & Poor's 500 slipped 8.84 points to 1,429.08 and the Nasdaq composite fell 32.40 points to 3,104.02.
The stumble came after a rally last week that took the Dow and the S&P 500 to their highest levels in more than four years.
The US central bank meets on Wednesday and Thursday amid anticipation that it will announce a third round of bond purchases.
Three stocks fell for every two that rose on the New York Stock Exchange. Trading volume was slightly lower than average at 3.2 billion shares.
Stock markets rose around the world last week after the European Central Bank announced a long-anticipated plan to support struggling countries in the European Union.
But several pieces of discouraging news out of China gave investors more reason to worry that one of the most important engines of the global economy was sputtering. Auto sales growth slowed to 3.7 percent in August, and imports shrank unexpectedly. Factory output slid to a three-year low in August, suggesting that aggressive action in Beijing has yet to gain traction. The Chinese president warned growth could slow further.
Investors hope the Fed will act this week to support the US economy. Chairman Ben Bernanke indicated in a speech last month that the central bank is inclined to provide new stimulus to the US economy if it's needed. Many anticipate a third round of bond purchases or other support for the financial system.
Since the speech, the government reported weak growth in jobs last month, heightening the case for more stimulus. There have been new signs that manufacturing and construction are slowing down.
"The economy is not going through a nosedive, so I'm not sure we need another stimulus," said John Manley, chief equity strategist at Wells Fargo Advantage Funds. "But Bernanke would rather make a mistake going in early with stimulus than not, especially since the markets will not tolerate inaction."
Yesterday the Fed said Americans cut back on their credit card use in July for the second straight month as many remain cautious in the face of high unemployment and slow growth. Total borrowing dipped US$3.3 billion in July from June to a seasonally adjusted US$2.705 trillion.
Among stocks making big moves was American International Group, which fell after the US government said Sunday it was selling shares in the insurer that would decrease its holdings below a majority stake for the first time since the bailout of AIG in 2008 at the height of the financial crisis.
AIG's stock lost 69 cents, or 2 percent, to US$33.30.
The Dow Jones industrial average fell 52.35 points to close at 13,254.29 yesterday. The Standard & Poor's 500 slipped 8.84 points to 1,429.08 and the Nasdaq composite fell 32.40 points to 3,104.02.
The stumble came after a rally last week that took the Dow and the S&P 500 to their highest levels in more than four years.
The US central bank meets on Wednesday and Thursday amid anticipation that it will announce a third round of bond purchases.
Three stocks fell for every two that rose on the New York Stock Exchange. Trading volume was slightly lower than average at 3.2 billion shares.
Stock markets rose around the world last week after the European Central Bank announced a long-anticipated plan to support struggling countries in the European Union.
But several pieces of discouraging news out of China gave investors more reason to worry that one of the most important engines of the global economy was sputtering. Auto sales growth slowed to 3.7 percent in August, and imports shrank unexpectedly. Factory output slid to a three-year low in August, suggesting that aggressive action in Beijing has yet to gain traction. The Chinese president warned growth could slow further.
Investors hope the Fed will act this week to support the US economy. Chairman Ben Bernanke indicated in a speech last month that the central bank is inclined to provide new stimulus to the US economy if it's needed. Many anticipate a third round of bond purchases or other support for the financial system.
Since the speech, the government reported weak growth in jobs last month, heightening the case for more stimulus. There have been new signs that manufacturing and construction are slowing down.
"The economy is not going through a nosedive, so I'm not sure we need another stimulus," said John Manley, chief equity strategist at Wells Fargo Advantage Funds. "But Bernanke would rather make a mistake going in early with stimulus than not, especially since the markets will not tolerate inaction."
Yesterday the Fed said Americans cut back on their credit card use in July for the second straight month as many remain cautious in the face of high unemployment and slow growth. Total borrowing dipped US$3.3 billion in July from June to a seasonally adjusted US$2.705 trillion.
Among stocks making big moves was American International Group, which fell after the US government said Sunday it was selling shares in the insurer that would decrease its holdings below a majority stake for the first time since the bailout of AIG in 2008 at the height of the financial crisis.
AIG's stock lost 69 cents, or 2 percent, to US$33.30.
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