Stocks edge lower with investors wary of consumer data, Fed
NEW YORK -- Stocks edged lower in early trading Tuesday ahead of a report that's expected to show another decline in consumer confidence this month.
The Conference Board releases its April survey of consumer confidence at 10 a.m. EDT. The consensus estimate of Wall Street economists surveyed by Thomson/IFR is that the research group's index of consumer confidence fell to 62 from March's 64.5 amid rising prices for energy and food. In March, the index, which is approaching a five-year low, fell nearly 12 points from February.
Wall Street remains worried that inflation could accelerate and curtail consumer spending, which accounts for more than two-thirds of the U.S. economy. That's also of paramount concern for the Federal Reserve, which begins a two-day policy meeting Tuesday afternoon.
The Fed is expected to cut interest rates by a quarter point on Wednesday, but then hold firm for the remainder of the year. The Fed is facing a difficult juggling act of trying to shore up the faltering economy without triggering inflation.
The Dow Jones industrial average fell 5.21, or 0.04 percent, to 12,866.54.
Broader markets were narrowly lower. The Standard & Poor's 500 index dropped 2.02, or 0.14 percent, to 1,394.35; and the Nasdaq composite index fell 3.97, or 0.16 percent, to 2,420.43.
On Monday, Wall Street finished narrowly mixed on light volume as investors were unwilling to take big bets ahead of the Fed decision. The same kind of trading environment was expected during Tuesday's session.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.81 percent from 3.82 percent late Monday.
Oil prices fell amid expectations that a supply disruption in Britain would soon be resolved and as the U.S. dollar strengthened further against the euro. Light, sweet crude for June delivery fell $2.65 to $116.10 a barrel on the New York Mercantile Exchange.
In corporate news, MasterCard Inc. spiked $17.37, or 7.2 percent, to $260.00 after the company reported profit more than doubled in the first quarter. The company said more customers overseas used their credit and debit cards for purchases, though spending within the U.S. rose at a moderate pace.
However, rival Visa Inc. sunk $3.05, or 3.9 percent, to $72.55 after it reported late Monday that first-quarter profit rose 28 percent. However, shares plunged in electronic trading amid concern that the world's biggest credit card processor will have a difficult time managing choppy U.S. economic conditions.
There was also further anxiety about the global credit crisis' impact on financial institutions. Deutsche Bank AG said Tuesday it wrote down $4.2 billion in leveraged loans, commercial real estate and mortgage-backed securities, during the first quarter, pushing Germany's biggest bank to its first quarterly loss since 2003 amid trading losses, lower revenue and global market jitters.
The Russell 2000 index of smaller companies fell 2.23, or 0.31 percent, to 723.14.
Declining issues surpassed advancers by 4 to 3 on the New York Stock Exchange, where volume came to 61.2 million.
Overseas, Japan's Nikkei stock average rose 0.22 percent. In morning trading, Britain's FTSE 100 rose 0.16 percent, Germany's DAX index fell 0.50 percent, and France's CAC-40 shed 0.26 percent.