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US: Stocks fall ahead of Fed decision
[NEW YORK] Wall Street stocks retreated Tuesday ahead of an expected Federal Reserve interest rate increase Wednesday and the likelihood of additional rate hikes later in the year.
Investors fixated on the Fed meeting as new data showed higher US wholesale inflation in February, raising anxiety Fed chief Janet Yellen could hint at more rate hikes this year. The Fed already was anticipating three increases this year.
"It's a foregone conclusion the Fed will raise rates" Wednesday, said Bill Lynch, director of investment at Hinsdale Associates.
"The question mark is what she says afterwards at the news conference as to how aggressive they're going to be the rest of the year in raising rates."
The Fed will release its latest economic forecasts Wednesday as well, including the outlook for the benchmark federal funds rate.
The Dow Jones Industrial Average dropped 0.2 per cent to close the session at 20,837.37.
The broad-based S&P 500 shed 0.3 per cent to end at 2,365.45, while the tech-rich Nasdaq Composite Index lost 0.3 per cent to 5,856.17.
Petroleum producers Marathon Oil and Chevron lost 3.3 per cent and 1.8 per cent, respectively, as oil prices continued to retreat on worries about excess supply.
Gainers included Wal-Mart Stores and Nike, each up 1.1 per cent, and Tesla Motors, up 4.8 per cent.
Airline shares were battered for a second day in a row as a major snowstorm in the US Northeast led to the cancellation of thousands of flights. United Continental lost 4.7 per cent and Delta Air Lines 2.3 per cent.
Valeant Pharmaceuticals International plunged 10.3 per cent as activist fund Pershing Square Capital Management exited its position in the drugmaker following major losses.