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player ready...Stocks eased in thin, nervous trading Monday, ahead of Tuesday’s meeting of Federal Reserve policymakers.
Despite efforts by the Fed in recent years to signal its moves at these meetings, a raging debate continued Monday among traders and analysts over what the central bank will, and should, do in light of a recent credit crunch.
The Dow Jones industrial average fell 39.10 points, to 13,043.42. Coca-Cola, McDonald’s and Boeing were among the biggest contributors to the Dow’s loss. General Motors, Hewlett-Packard and Exxon Mobil were winners.
The broader Standard & Poor’s 500 index lost 7.60, to 1476.65. The Nasdaq composite index dropped 20.52, to 2581.66. The Russell 2000 small-company index sank 7.68, to 775.81.
Technology stocks and small-company stocks posted bigger percentage losses than the Dow, as investors continued to view large-company stocks as safe havens.
Financial-services stocks were hit by news of heavy customer withdrawals from a British mortgage lender, Northern Rock.
Late Monday, shares of ETrade Financial dropped in after-hours trading. The company cut its forecast of 2007 profits by at least 25 percent because of costs associated with its decision to exit the wholesale mortgage business.
Financial-services provider Marsh & McLennan fell on word that the head of its insurance brokerage unit quit abruptly. Shares dropped $1.58, to $24.60.
Treasury securities closed lower, as analysts backed away from saying the Fed would cut its short-term target interest rate, currently at 5.25 percent, by half a percentage point instead of a quarter point.
Crude oil for October delivery rose $1.47 a barrel, to a record closing high of $80.57. Energy-related stocks was the only one of the 10 major sectors in the S&P 500 to advance in Monday’s trading.
TREASURY AUCTIONS: Interest rates rose at the weekly auctions of 3- and 6-month Treasury bills.
The discount rate on 3-month bills was 4.05 percent, up from 3.80 percent at last week’s auction. The rate on 6-month bills was 4.13 percent, up from 4.02 percent last week.
Monday’s coupon-equivalent investment rates were 4.16 percent for 3-month bills and 4.29 percent for 6-month bills.