Stocks Slip Ahead of Fed De.
01/30/08 10:22 ESTThe Dow Jones industrial average fell 34.22, or 0.27 percent, to 12,446.08 after rising 273 over Monday and Tuesday.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 2.60 percent, or 0.19 percent, to 1,359.70, while the Nasdaq composite index fell 0.98, or 0.04 percent, to 2,357.08.
Government bond prices slipped, sending yields higher. The yield on the 10-year benchmark note inched up to 3.69 percent from 3.68 percent late Tuesday.
The economy slowed more than expected in late 2007, according to the Commerce Department's preliminary fourth-quarter gross domestic product report.
The economy grew at a 0.6 percent annual clip, below the 0.8 percent pace projected by analysts polled by Thomson/IFR and well below the 4.9 percent growth seen in the third quarter.
For all of 2007, gross domestic product grew 2.2 percent, the weakest growth since 2002. The tepid late-year growth should help advance the case that the Fed needs to be aggressive in reducing rates, given that many economists believe growth has slowed further in the current quarter.
Concerns that global banks have not seen the last of the fallout from the subprime mortgage crisis were reinforced by news Wednesday that two major European banks revealed further impact from the crisis.
Swiss bank UBS said it will have a $11.4 billion fourth-quarter loss, largely due to subprime problems. Analysts had expected a much smaller shortfall. French bank BNP Paris Wednesday said its quarterly profit will decline by 40 percent from year-earlier levels.
Meanwhile, Yahoo Inc. took a thumping Wednesday after the Internet search company said its quarterly profit declined, its 2008 sales outlook was below analysts' forecasts, and that it was slashing 1,000 jobs.
Yahoo Inc. fell $1.84, or 8.8 percent, to $18.97.
The biggest loser among the Dow components Wednesday was Merck & Co., which late Tuesday reported a $1.63 billion fourth-quarter loss in the fourth quarter due mostly to charges for its Vioxx litigation settlement.
Merck fell $1.61, or nearly 3.4 percent, to $46.40.
Overseas markets fell ahead of the U.S. rate decision. In Tokyo, the Nikkei fell 0.99 percent. In Europe, London's FTSE 100 dropped 0.60 percent, France's CAC 40 lost 1.07 percent and Frankfurt's DAX rose 0.07 percent.
Crude oil rose 55 cents to $92.19 a barrel on the New York Mercantile Exchange.
The dollar was mixed against rival currencies,
while gold prices dipped.
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