The markets were uneasy the whole day and ended down moderately. The Dow Jones Industrial Average was down 39.1 points (-0.29%), the S&P 500 slipped 7.6 points (-0.51%), and the Nasdaq Composite Index lost 6.59 points (-0.79%). There was light volume on the NYSE at 1.1 billion shares, and decliners beat advancers 2:1.
The morning began with more bad news from UK lender Northern Rock, who announced that customers had withdrawn $4 billion from its branches after it required emergency funding from the Bank of England on Friday. Former Fed Chairman Alan Greenspan could also be blamed for the weak start, as he said in an interview on 60 Minutes Sunday that his outlook for the U.S. economy was "pretty gloomy." All this as investors await the Fed's next move, which will finally happen tomorrow. U.S. 10-year Treasury's rate inched up slightly to 4.47%.
All major sectors finished the day negative, except energies (0.04%), which got a lift from a record close in crude (up $1.47 to $80.57). Goldman Sachs upped it year-end estimate for crude prices to $85 from $72. Financials (-0.80%), consumer discretionary (-0.80%), and heath care (-0.70%) were the worst-performing sectors. GM was up another 1% as its negotiations with unions continue to progress. Newell Rubbermaid upped its guidance and surged 8.7%. Finally, Microsoft lost 1.1% after European courts dismissed its antitrust appeals and ordered the company to pay $700 million in fines.
Both the Fed's decision and accompanying comments will likely have an effect on the markets for the near future. Most analysts believe a 25 basis- point cut is locked in, but the comments will be closely scanned for easing bias. The decision will be announced tomorrow at 2:15 PM. Lehman earnings and the PPI (8:30 AM) will also be announced tomorrow.
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