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Journalism of Courage
Caution before the Federal Reserve releases details from its September meeting drove stocks slightly lower Tuesday.
Major indexes pared some of their early losses as technology stocks edged higher,led by Google Inc. and Apple Inc. The tech-heavy Nasdaq composite index rose slightly,while the Dow Jones industrial average fell nearly 30 points in midday trading.
Google shares rose after the company said it would invest in wind farms off the East coast. Apple hit a new record,approaching $300 for the first time,after Wal-Mart Stores Inc. said its stores will start carrying the popular iPad. Intel Corp. shares remained in a tight range before the chipmaker releases its quarterly results after the closing bell.
In other corporate news,shares of King Pharmaceuticals Inc. surged after Pfizer Inc. agreed to buy the drug maker for $3.6 billion in cash. Traders sold shares of CSX Corp. before the company reports results after the market close.
The Dow Jones industrial average fell 27.21,or 0.3 percent,to 10,982.75 in midday trading,while the Standard & Poor’s 500 index dropped 1.87,or 0.2 percent,to 1,163.45.
The Nasdaq composite index,which is heavily weighted with technology companies,rose 3.65,or 0.2 percent,to 2,405.98.
Treasury prices continued to rise on hopes that the Fed will step up its purchases of government bonds. The yield on the 10-year Treasury note,which moves opposite to its price,fell to 2.37 percent from 2.39 percent late Friday. Bond markets were closed Monday for the Columbus Day holiday.
The Fed hinted in the brief statement it released after its meeting last month that it was prepared to help jump-start the stagnant economy,though it provided few details. Peter Cardillo,chief market economist for Avalon Partners Inc.,said investors “want to see exactly what the Fed is thinking.”
Stocks have rallied in recent weeks as traders bet the Fed will enact the bond-buying program as early as its next meeting,which ends Nov. 3. Buying bonds would drive interest rates and yields even lower,which makes stocks a more attractive investment.
Paul Brigandi,senior portfolio manager at Direxion Funds,said a pause in the market is normal because stocks have surged on expectations for Fed actions and upbeat earnings in the coming weeks. The Dow has risen 1.8 percent this month and is up about 10 percent since the beginning of September.
“A lot of the best-case scenarios are priced into the market right now,” Brigandi said. Now investors want to pause and see if those scenarios play out,he said.
Google rose $5.73to $544.57. Apple climbed $1.57 to $296.93. It rose as high as $297.73 earlier in the day. Intel fell 1 cent to $19.55. King Pharmaceuticals rose $4.01,or 39.5 percent,to $14.16. Pfizer shares fell 2 cents to $17.36. CSX shares fell 84 cents to $57.33.
About three stocks fell for every two that rose on the New York Stock Exchange where volume came to 333.9 million shares.
