Wall Street closed Monday’s lightly-traded session mixed, as investors awaited results of the Federal Reserve’s two-day meeting to evaluate interest rates.
The Dow Jones industrial average finished the day down 29.86 points, or 0.26 percent, while the broader Standard & Poor’s 500-stock index was off 1.34 points, or 0.10 percent. The Nasdaq composite index, full of technology stocks, added 2.76 points, or 0.12 percent.
“There are a lot of people sitting on the fence waiting for the Fed,” said Mark Donahoe, managing director and head of equity trading at Piper Jaffray in Minneapolis.
Donahoe and other analysts said investors were prepared for a one-quarter percent increase in short-term rates but were waiting for hints of future Fed action.
“The question is, are they going to take the foot off the pedal in terms of tightening or do they see some inflation pressures going forward,” he said.
Kim Caughey, equity research analyst, Fort Pitt Capital Group in Pittsburgh, agreed, saying that “everything seems to be steady as she goes today” as people await the Fed’s decision.
The Fed Open Market Committee was holding its first meeting under its new chairman, Ben Bernanke, on Monday and Tuesday, and analysts widely expected the committee to follow in the footsteps of former Chairman Alan Greenspan and raise rates yet again. If so, the announcement Tuesday would boost short-term rates one-quarter point to 4.75 percent.
While the market widely expects this 15th consecutive increase, it will be focusing on clues to whether the Fed believes it has raised rates sufficiently to contain inflation, or will push them still higher.
Traders also kept a close watch on crude oil prices Monday, which dipped under $64 a barrel after the release of three foreign hostages by Nigerian militants eased concerns about supplies from the oil-rich African nation. But the volatile Nigerian situation — and nagging worries about supplies from Iran — were expected to limit the price decline.
The Nasdaq got a boost from Santa Clara, Calif.-based Intel Corp. after two analysts speculated that a pair of soon-to-be-released processors could give the chip maker an edge over rivals and First Albany analyst Auguste Richard upgraded his rating to “neutral” from “underperform.” Shares of Intel rose 15 cents, or 0.7 percent, to $19.75.
Walgreen Co. rose 65 cents, or 1.46 percent, to $45.02 after the nation’s biggest pharmacy chain by revenue reported second-quarter earnings of $523.5 million, or 51 cents a share. It reported strong sales, but results were a penny short of the 52 cents expected by analysts surveyed by Thomson Financial.
Lucent Technologies Inc. rose 2 cents, or 0.65 percent, to $3.08 as investors weighed last week’s announcement that the Murray Hill, N.J., company was pursuing a “merger of equals” with France’s Alcatel SA. It comes on the heels of several mega-mergers is the telecommunications industry.
Overseas, Japan’s Nikkei stock average closed 0.5 percent higher. Britain’s FTSE 100, Germany’s DAX index and France’s CAC-40 all closed down slightly more than 1 percent.