Nervous investors sent stocks lower Wednesday, as they anxiously awaited the Federal Reserve’s decision on interest rates and looked past an increase in U.S. oil inventories and a solid advance in the gross domestic product.
“We’re just waiting for news tomorrow,” said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. “Traders are like kids in the back seat of the car saying, ‘Are we there yet? Are we there yet?’ The traders are saying, ‘Is the report out? Is the report out?’”
Stocks were higher in morning trading as oil prices fell and a Commerce Department report said the economy grew at an annual rate of 3.8 percent in the first quarter of 2005. The report’s new reading on gross domestic product was a marked improvement from the 3.5 percent estimated a month ago and matched growth in the final quarter of 2004.
But the two-day meeting of the Fed’s Open Market Committee, which sets the central bank’s interest rate policy, weighed on the market. The Fed’s decision, and its accompanying statement assessing the economy, is expected Thursday afternoon.
The Dow Jones industrial average finished the day down 31.15 points, or 0.3 percent, while the broader Standard & Poor’s 500-stock index fell 1.72 points, or 0.1 percent. The tech-rich Nasdaq composite index was down one point, or 0.1 percent.
Crude oil futures continued to fall after the Energy Department reported a substantial increase in gasoline production and lesser increases in oil imports and commercial crude inventories. The Energy Department’s oil report reassured stock investors that the record-high oil prices set earlier in the week may continue to drop and that an oil shortage doesn’t look to be imminent.
“Our sense is that companies have not been challenged to get their hands on crude,” said Bob Morris, director of equity investments at Lord Abbett. “It’s more expensive, but the availability is there.”
Oracle Corp. said its profit rose 3.2 percent in the fourth quarter, its best year-over-year profit and revenue gain since 2000. This was the first full quarter that included the PeopleSoft Inc. business, which it bought for $10.6 billion. The earnings far exceeded Wall Street’s expectations and Oracle rose 74 cents, to $13.57.
The Food and Drug Administration plans to add information about possible psychiatric side effects — including suicidal thoughts and psychotic behavior — to the labels of Ritalin and Johnson & Johnson’s Concerta.
The FDA said it would also investigate other drugs used to treat attention deficit disorder, The Wall Street Journal reported. Johnson & Johnson fell 37 cents, to $65.70.
Monsanto Co.’s stock fell $4.84, or 7.13 percent, to $63 after the company, which makes RoundUp herbicide and bioengineered seeds, said third-quarter earnings fell 81 percent from last year due to a $248 million write-off of research and development related to acquisitions. The St. Louis company also issued a full-year earnings outlook for fiscal 2005 that is below Wall Street’s consensus.
Overseas, Japan’s Nikkei stock average rose 0.55 percent. Britain’s FTSE 100 was up 0.37 percent, Germany’s DAX index was up 0.57 percent, and France’s CAC-40 index was up 0.90 percent.