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- Pedestrian struck on Broadway (12/11/17)4
- Kelso resident brings home $60K in lottery winnings (12/14/17)
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Stocks tumble on more profit-taking and ahead of Fed meeting
AP Business WriterNEW YORK (AP) -- Wall Street faltered Monday, sending stocks sharply lower as investors locked in their gains from the recent rally and waited to see if the Federal Reserve would lower interest rates again.
The Dow Jones industrials fell back below 10,000 after closing above the milestone last week for the first time since before the terror attacks. Analysts weren't too concerned, though, saying some pullback was inevitable after the market's recent advance.
The Dow closed down 128.01, or 1.3 percent, at 9,921.45, its third consecutive declining session, according to preliminary calculations.
Broader stock indicators also slid. The Standard & Poor's 500 index lost 18.38, or 1.6 percent, to 1,139.93. The Nasdaq composite index fell 29.14, or 1.4 percent, at 1,992.12, after finishing above 2,000 last week for the first time since August.
"You've had a huge run here over last 10 weeks," said Steven Goldman, market strategist at Weeden & Co. "This just a pause, so the market can rest. But I think we're going to be going back and forth from here for a while. After advancing so much, we can't keep going straight up. "
Indeed, stocks have rallied strongly in recent weeks and some of the recent losses reflect concerns that some of the gains are premature -- particularly with fourth-quarter warnings season just beginning. Since Sept. 21, the day the indexes made their low for the year, the Dow has risen more than 20 percent, while the Nasdaq has gained 40 percent.
In trading Monday, Compaq Computer fell $1.62 to $9.70 after a key Hewlett-Packard shareholder Friday announced opposition to the planned merger between the two companies. HP lost 52 cents to $23.
Retailing and financial sectors also suffered on worries that the sluggish economy would continue to hurt business for a while. Home Depot dropped $1.15 to $48.26, while American Express fell 70 cents to $34.
Even news that General Electric expected to expects to achieve double-digit earnings growth next year failed to cheer investors. GE dropped 35 cents at $36.80.
But the main focus of the market was on the Fed meeting scheduled for Tuesday, and what many hope will be the 11th interest rate reduction of the year.
The cut is widely expected, although there is some debate over how big it will be. There is also some thought that the reduction could be the Fed's last because rates are already at a 40-year low and companies including Cisco and Oracle have issued relatively upbeat forecasts.
In any case, investors were unwilling to make any big moves before the Fed's decision.
"People are waiting to see what the Fed does and what their tone is," said John Forelli, portfolio manager for John Hancock Core Value Fund. "My guess is that their tone will be that they will continue to cut rates if necessary. To some degree, that's already factored in stock prices, but I think the market will still be pleased."
Declining issues led advancers more than 2 to 1 on the New York Stock Exchange, where volume came to 1.18 billion shares, down from Friday's 1.24 billion.
The Russell 2000 index fell 7.03 to 474.18.
Overseas, Japan's Nikkei stock average dropped 2.1 percent. In Europe, Germany's DAX index fell 1.4 percent, Britain's FT-SE 100 slipped 1.5 percent, and France's CAC-40 lost 1.9 percent.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com