Wall Street dips as traders gear up for Fed; ends July up
NEW YORK (Reuters) - U.S. stocks fell on Tuesday with traders' sights set again on Wednesday's Federal Reserve statement on the economy and a possible new round of stimulus.
The Nasdaq Composite, which underperformed on Monday, was the smallest decliner among the three major U.S. stock indexes in Tuesday's session, thanks in part to Apple (AAPL.O) shares' gain of 2.6 percent after a source said a new product will makes its debut at an event in September.
Volume was below average as Wall Street wrapped up its second consecutive positive month, with most of the monthly gains accumulated last week on hopes for more action from both the Fed and the European Central Bank. The ECB will meet on Thursday.
"Markets seem to be moving on talk, but I don't think that's going to be enough in the next few days," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto. "I think the market risks being disappointed in terms of substance."
Coach (COH.N) slid 18.6 percent to $49.33 after the upscale handbag and leather goods maker reported lower-than-expected fourth-quarter sales. That drop was the worst single-day percentage drop for Coach's stock since September 17, 2001, which was the first trading day after the September 11 attacks on the World Trade Center and the Pentagon. Coach was the S&P 500's biggest loser in Tuesday's session.
For the month of July, the Dow rose 1 percent, while the S&P 500 climbed 1.3 percent and the Nasdaq added 0.2 percent. After seven months, the S&P 500 has gained nearly 10 percent for the year, despite a slowing world economy.
In Tuesday's session, the Dow Jones industrial average .DJI fell 64.33 points, or 0.49 percent, to 13,008.68 at the close. The S&P 500 Index .SPX dropped 5.98 points, or 0.43 percent, to 1,379.32. The Nasdaq Composite .IXIC lost 6.32 points, or 0.21 percent, to 2,939.52.
About 6.5 billion shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, below the 2012 daily average of 6.74 billion through Monday's close.
Roughly seven issues fell for every five that rose on both the New York Stock Exchange and the Nasdaq.
Cirrus Logic (CRUS.O) was also one of the Nasdaq's top gainers a day after the maker of integrated circuits posted a better-than-expected quarterly profit. Its shares shot up 23.2 percent to close at $36.77.
Facebook (FB.O) shares slid 6.2 percent to $21.71, their third consecutive record closing low, after a lackluster quarterly report last week showed decelerating user growth.
Pfizer Inc (PFE.N) stock rose 1.4 percent to $24.04 after earlier hitting $24.48, its highest level since December 2007. The largest U.S. drugmaker reported higher-than-expected quarterly earnings and affirmed its 2012 profit forecast.
According to Thomson Reuters data through Tuesday morning, of the 321 companies in the S&P 500 that have reported second-quarter earnings to date, 67.3 percent have reported earnings above analysts' expectations. Over the past four quarters, the average beat rate is 68 percent.
U.S. home prices rose for the fourth month in a row in May, suggesting the housing market's recovery kept gaining traction, even as the broader economy is still struggling. Other data showed consumer confidence unexpectedly rose in July but spending fell in June for the first time in nearly a year as Americans saved more.
(Reporting by Rodrigo Campos; Editing by Jan Paschal)