The S&P 500 and the Dow fell on Wednesday after a report showed new home sales dropped unexpectedly in December, while Caterpillar Inc
Investors were also wary before U.S. President Barack Obama's State of the Union speech and the Federal Reserve's policy statement later on Wednesday. The Fed statement may provide clues on how long it will keep in place ultra-low interest rates and its easy-money program.
There is risk aversion about extending capital into the market place, said Craig Peckham, equity trading strategist at Jefferies & Company in New York. There is concern about how the language in the (Fed's) statement changes relative to what we saw in December.
The Dow Jones industrial average <.DJI> fell 33.40 points, or 0.33 percent, at 10,160.89. The Standard & Poor's 500 Index <.SPX> lost 2.42 points, or 0.22 percent, at 1,089.75. The Nasdaq Composite Index <.IXIC> inched up 0.10 points, or 0.00 percent, at 2,203.83.
New home sales fell for the second straight month, according to the Commerce Department. That weighed on home building stocks such as Pulte Homes Inc
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.
Obama, in his first State of the Union address, is expected to promise the creation of more jobs and a slimmed budget deficit. The S&P 500 has fallen more than 5 percent over the last week, partly due to political uncertainty surrounding banking regulation.
On the Nasdaq Gilead Sciences Inc
(Editing by Kenneth Barry)