U.S. stocks fell on Wednesday after data showed new home sales dropped unexpectedly in December, as investors remained wary ahead of the U.S. president's State of the Union speech and the end of the Federal Reserve policy meeting.
President Barack Obama, in his first State of the Union address, is expected to promise more jobs creation and a slimmed budget deficit. Fed policymakers will issue a statement that may give clues on how long the Fed will keep in place ultra-low interest rates and its easy-money program.
New home sales fell for the second straight month, according to the Commerce Department, while analysts expected a rise.
Caterpillar posted stronger-than-expected earnings but forecast 2010 profit below expectations, while United Tech posted a 6 percent drop in quarterly profit and its finance chief warned of a tough first quarter.
The home sales data wasn't good, and coming on top of some bad outlooks, is pressuring the market, said Dan Cook, senior market analyst at IG Markets in Chicago. However, we're not down as much as we could have been since no one is going to make too big of a commitment before the Fed meeting and Obama's speech.
The Dow Jones industrial average <.DJI> fell 36.57 points, or 0.37 percent, to 10,155.51. The Standard & Poor's 500 Index <.SPX> dropped 3.85 points, or 0.39 percent, to 1,087.94. The Nasdaq Composite Index. <.IXIC> lost 3.01 points, or 0.14 percent, to 2,200.77.
Losses in the Nasdaq were limited by better-than-expected results from Gilead Sciences Inc
(Editing by Jeffrey Benkoe).