Stocks fell slightly Tuesday after the Federal Reserve raised interest rates as expected, exacerbating traders' ill humor after Monday's...
NEW YORK — Stocks fell slightly Tuesday after the Federal Reserve raised interest rates as expected, exacerbating traders’ ill humor after Monday’s disappointing profit forecast from Dell.
The Dow Jones industrial average fell 33.30 to 10,406.77.
Microsoft, one of the 30 Dow stocks, bucked the down trend by adding 26 cents to close at $25.96 a share. Boeing, also a Dow stock, gained 41 cents to $65.05.
Broader stock indicators also dropped. The Standard & Poor’s 500 index fell 4.25 to 1,202.76, while the Nasdaq composite index was dragged down by Dell, slipping 6.25 to 2,114.05.
Most Read Stories
- Scientists say recent quake swarm at Rainier is not unusual
- FBI investigating off-duty work by Seattle police at construction sites, parking garages
- 'Polite Robber' suspect told similar sob story when arrested 8 years ago
- Swastika-wearing man punched on Seattle street, removes swastika, police say
- Is this Seattle bus stop the worst in America?
The Fed’s quarter-percentage-point increase in the nation’s benchmark interest rate, pushing it to 4 percent, was widely anticipated. The Fed also signaled it would continue gradually raising rates but noted that inflation has had relatively little effect on the economy in recent months.
Stocks may be falling because of sentiment on Wall Street that the increases are unwarranted. This increase and the one or two expected to follow may serve to give Ben Bernanke, who has been nominated as the next Federal Reserve chairman, wiggle room to cut rates as a stimulus next year, said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati.
The most recent sign of a slowing economy came from PC maker Dell, which trimmed sales and income targets for the current quarter after the close of regular trading Monday, saying sales in the United States and Britain were weak.
The company also said it would take a third-quarter charge of $450 million to restructure its consumer unit and replace some faulty PC circuits. Dell fell $2.64 to $29.24.
Crude-oil futures fell. A barrel of light crude was quoted at $59.85, up 9 cents, in trading on the New York Mercantile Exchange.
The nation’s manufacturing activity grew more slowly during October as companies felt the strain of a continuing rise in energy and raw-materials prices, the Institute for Supply Management said.
The institute’s measure of costs, its prices index, rose to 84.0 in October from 78.0.
More broadly, concerns about inflation, natural disasters, housing prices and energy prices continue to hang over the market, said Aaron Gurwitz, a senior strategist at Lehman Brothers private investment-management group.
“The problem is that we see these concerns as not getting better; they’re sort of staying the same as they are or getting worse,” he said.
Bob Sitko, assistant vice president, USAA Private Investment Management, agreed.
“Looking into next year, we have more worry than optimism.”