US stocks were nearly flat on Monday after dropping earlier following comments by Eric Rosengren, the Federal Reserve Bank of Boston President, said the economy's expansion will slow down.
U.S. stocks last week reported their biggest weekly gain since March after Fed officials hinted that more interest rate cuts may be on the way. Rosengren said the economy's expansion will slow down following its constant pace for the last two quarters.
We are currently expecting the economy to grow well below potential for the next two quarters, before gradually improving over the course of next year,'' Rosengren said in a speech in Boston.
Our research suggests that the foreclosure crisis will get worse before it gets better, but our forecast is quite dependent on how far house prices fall.''
A private research group, The Institute for Supply Management, said in a report today that manufacturing expanded in November at the slowest pace in 10 months. This added to show that the central bank may need to reduce borrowing costs to sustain economic growth.
Rosengren didn't address the monetary policy in his speech. Fed officials will meet in eight days decide whether to lower the interest rate a third straight time or not.
In stocks today, the Standard & Poor's 500 Index lost 3.78 to 1,477.36 of 1:02 p.m. in New York. The Nasdaq Composite Index was down 0.50 to 2,660.46. The Dow Jones Industrial Average rose 2.84to 13,374.56.