Wall Street finished with a mixed performance today, as investors traded cautiously ahead of the Federal Reserve's Wednesday decision on...

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NEW YORK — Wall Street finished with a mixed performance today, as investors traded cautiously ahead of the Federal Reserve’s Wednesday decision on interest rates.

The Dow Jones industrial average fell 39.81 to 12,831.94.

Microsoft, one of the 30 Dow stocks, sank 35 cents to close at $28.64 a share. Boeing, also a Dow stock, gained 55 cents to $85.53.

The biggest drag on the Dow was the component Merck, which sank $4.30, or 10.4 percent, to $37.14 after the Food and Drug Administration refused to approve Merck’s new cholesterol drug Cordaptive.

Broader markets were mixed. The Standard & Poor’s 500 index dipped 5.43 to 1,390.94, and the Nasdaq composite index rose 1.70 to 2,426.10.

The Fed, facing a faltering economy but also rising inflation, is expected to cut interest rates by another quarter point after its two-day meeting concludes Wednesday. Many investors believe policymakers will then signal that they are planning to hold rates steady for a while.

Consumers have been worried about inflation because it means energy and grocery bills are harder to pay. Wall Street is also concerned, because inflation tends to curtail consumer spending, which accounts for more than two-thirds of the U.S. economy.

The Conference Board said today its April index of consumer confidence fell for the fourth straight month because of heightened disappointment about soaring prices and the weakening job market.

“There’s no panic out there (in the market) because of the consumer confidence numbers, but there is more concern about inflation then we had just a few weeks ago,” said Jim Herrick, director of equity trading at Baird. “Everyone is interested in what the Fed will do about it.”

A pullback in oil prices today eased inflationary concerns a bit and helped keep the stock market from tumbling sharply. But some analysts say the market has been deceptively calm in recent weeks given the weakness of the economy and how consumers are struggling not only with a slumping housing and job market but also high prices.

“So far, investors have bought into the notion that the Federal Reserve has staved off a wider calamity, when in fact what they’ve done is allow the financial system to stay afloat as they work down, write down, a tremendous amount of bad debt,” said Joseph Battipaglia, chief investment officer at Ryan Beck.

Slashing the key rate by more than half since last summer has not trickled down to consumers’ borrowing rates, he noted, and instead has “punted the dollar. It’s sparked commodity runs. It has translated to spikes in food and energy costs for the public at exactly the wrong time.”