Stocks mixed
ahead of Fed meeting

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By Lisa Singhania
Associated Press

NEW YORK >> Wall Street stalled today as investors took profits from last week's big rally and considered the possibility that the Federal Reserve might not cut interest rates after all. Blue chips pulled back slightly, while technology shares managed a small gain.

Analysts said would-be buyers wanted to see what retail earnings and other economic data looked like, and whether companies would meet a government deadline to certify financial statements later this week.

The Dow Jones industrial average closed down 56.56, or 0.7 percent, at 8,688.89 after rising 432 points last week. Declining issues led advancers 8 to 7 on the New York Stock Exchange. Volume was light.

Broader stock indicators were mixed. The Standard & Poor's 500 index slipped 4.84, or 0.5 percent, to 903.80, and the Nasdaq composite index rose 0.72 to 1,306.84. The Russell 2000 index rose 0.15 to 388.60.

The price of the Treasury's 10-year note was up 3/8 point today, while its yield fell to 4.21 percent from 4.26 percent late Friday. Two-year Treasury notes were unchaged with a yield of 2.06 percent.

Although the market's losses narrowed late in the day, analysts were hesitant to read too much into the move, noting trading volume was light -- suggesting most investors were staying away. "There's just not much going on today. People are just waiting to see what the Fed is going to do Tuesday, who does or doesn't sign their financial documents on the 14th and to see if market can continue its uptrend," said Robert Streed, portfolio manager of Northern Select Equity Fund in Chicago.

Stocks rose steadily last week on a mix of bargain hunting following a huge selloff and hopes that the Fed might cut interest rates further because of data suggesting that the economy is faltering. The Fed's Open Market Committee is scheduled to meet tomorrow, but by today few on Wall Street were expecting a reduction.

Investors were also selling to lock in gains from the last week's rally.

"At one time the market had hoped they were going to cut, I don't think the Fed is going to. They're going to remain on the sidelines," said Mike Kayes, chief investment officer at Eastover Capital.

US Airways' decision to file for bankruptcy over the weekend soured the session for the airlines sector. UAL, United Airlines' parent, fell $1.40 to $3.80, on concerns the carrier is also vulnerable and might be the next carrier forced into bankruptcy. US Airways shares did not trade on the New York Stock Exchange today.

Boeing, which makes airplanes, fell 50 cents to $40.50.

Technology stocks, which had enjoyed sizable gains last week, struggled. Intel fell 36 cents to $17.50 after Salomon Smith Barney reduced its estimates on the stock, citing soft demand. Applied Materials, which counts Intel as one of its biggest customers, was down 28 cents at $13.58 ahead of earnings due out tomorrow.

Imclone rose 68 cents to $8.02 following an innocent plea today by founder and chief executive Samuel Waksal to insider trading charges. Waksal also said he still believed his company's highly touted cancer drug, Erbitux, has the potential to help thousands of cancer victims.

Investors were also focused on retailers, many of whom are expected to report earnings tomorrow including J.C. Penney and Wal-Mart. Penney rose 12 cents to $16.75, while Wal-Mart fell 79 cents to $48.41.

Also this week, investors will be watching Wednesday to see whether the companies required to certify their financial reports meet the Securities and Exchange Commission's deadline. Among the companies certifying results today were J.P. Morgan Chase and Kellogg, but it failed to boost their stocks. J.P. Morgan Chase fell 89 cents to $25.46, while Kellogg dropped 2 cents to $34.70.

Analysts say the main issue for the market remains the prospects for improving profits at companies. "We're going to bounce around until we get a clear picture about whether the economy is going to accelerate in the second half," Kayes said.

Overseas, Japan's Nikkei average fell 2.5 percent. In Europe, Germany's DAX index lost 3.0 percent, Britain's FTSE 100 fell 2.3 percent, and France's CAC-40 slipped 2.4 percent.