Jittery before the Fed

[notiCIas]

Jittery before the Fed

Worries about what the central bank might say Thursday about interest rates keep stocks mixed.

June 29, 2005: 4:17 PM EDT


NEW YORK (CNN/Money) - Blue chips slipped and the broader market stalled Wednesday as investors flat out refused to move much ahead of the Federal Reserve's much-anticipated statement Thursday afternoon.

The Dow Jones industrial average (down 30.07 to 10,375.56, Charts) slipped 0.3 percent and the broader Standard & Poor's 500 (down 1.74 to 1,199.83, Charts) lost around 0.1 percent, according to early tallies.

The Nasdaq composite (down 1.00 to 2,068.89, Charts) hovered nearly unchanged.

Oil prices slumped for the second session, losing 1.6 percent after a strong read on weekly oil inventories. Crude closed at a record high of $60.54 Monday.

Tech bellwether Oracle and Dow component AIG both reported quarterly earnings that exceeded estimates. That gave a boost to those specific stocks but failed to move the broader market.

Treasury prices ended barely lower, nudging yields higher. The dollar was little changed versus the euro and gained versus the yen.

Here's a look at what was moving near the close.

Oil falls, but remains near record

Oil prices slipped, extending earlier losses after the weekly oil inventory report showed a larger-than-expected rise. U.S. light crude oil for August delivery fell 94 cents to settle at $57.26 a barrel on the New York Mercantile Exchange, a loss of 1.6 percent.

Crude hit an all-time closing high of $60.54 on Monday, holding stocks in check; a 4 percent tumble in oil prices led to a stock market rally Tuesday.

Oracle (up $0.74 to $13.57, Research), one of the largest software makers, reported fiscal fourth-quarter earnings and sales that rose from a year ago and beat forecasts and issued guidance in line or above the Street's estimates for the current quarter and fiscal 2006. The stock jumped about 5 percent.

Troubled insurer AIG (up $3.23 to $58.40, Research) rallied 4 percent after posting improved quarterly results late Tuesday. The company, a Dow component, is facing lawsuits and regulatory probes for overstating earnings over a five-year period.

Shares of General Mills (down $3.36 to $47.25, Research) -- which makes Cheerios and other foods -- slipped after reporting weaker-than-expected quarterly earnings.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers nine to seven on volume of 978 million shares. On the Nasdaq, decliners narrowly topped advancers on volume of 1.29 billion shares.

GDP grows faster than forecast
Investors also welcomed a higher-than-expected revision to first-quarter gross domestic product growth.

GDP grew at a 3.8 percent annual rate in the quarter, revised up from earlier reads. Economists surveyed by Briefing.com thought GDP would grow at a 3.7 percent rate.

Meanwhile, investors are awaiting Thursday's statement from the Federal Reserve. The central bank ends its two-day policy meeting that day, and another quarter-point rate hike is widely expected. As such, what the Fed has to say in the statement will be watched closely for hints about future rate hikes.

A rate hike would be the ninth in a row, bringing the Fed funds rate, an overnight bank lending rate, to 3.25 percent.

Treasury bonds gave up early gains to trade lower, raising the yield on the 10-year note to 3.99 percent from 3.97 percent late Tuesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar was mixed, gaining versus the yen but slipping against the euro.

COMEX gold reversed ground and rose 90 cents to $438.60 an ounce.

Overseas, European shares and the Japanese Nikkei ended higher.