A decline in energy and healthcare stocks weighed on Wall Street on a relatively quiet Tuesday as investors awaited the outcome of the US Federal Reserve's two-day policy meeting. Global markets fell and the yen rose earlier in the day after the Bank of Japan's lowered inflation expectations suggested it may increase its stimulus program.
"After a very strong bounce in risk assets in the recent few weeks, investors are collectively holding their breath waiting for the Fed tomorrow," said Bill Merz, investment strategist at US Bank Wealth Management in Minneapolis.
The Fed is not expected to raise interest rates at its meeting, which starts on Tuesday, but its comments will be parsed for clues on the path of future hikes.
Investors will also keep a close eye on data this week, after recent reports have painted a mixed picture of the health of the US economy.
One report on Tuesday showed retail sales fell less than expected, but a sharp downward revision to January's sales could reignite concerns about the economy's growth prospects.
At 12:40 pm ET (1640 GMT), the Dow Jones industrial average was down 34.86 points, or 0.2 percent, at 17,194.27.
The S&P 500 was down 10.02 points, or 0.5 percent, at 2,009.62. Six of the 10 major sectors were lower.
The Nasdaq Composite was down 26.01 points, or 0.55 percent, at 4,724.28.
A renewed drop in oil prices dragged the S&P energy sector down 1.7 percent. Chevron was down 2 percent at $92.38.
Valeant Pharma's near 50 percent slide to $35 dominated most of the market's activity.
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