* Lockhart, Evans latest Fed officials to mention Sept.
* IBM, Dow's biggest decliner, drops after Credit Suisse
* Walt Disney Co shares fall 1 pct in after-hours trading
* Dow off 0.6 pct, S&P 500 down 0.6 pct, Nasdaq down 0.7 pct
By Chuck Mikolajczak
NEW YORK, Aug 6 U.S. stocks slid for a second
consecutive day on Tuesday after comments from a pair of U.S.
Federal Reserve officials left investors uncertain about the
timing of a possible reduction in its bond-buying program.
Dennis Lockhart, president of the Federal Reserve Bank of
Atlanta, told Market News International in an interview that the
Fed could begin trimming the size of the stimulus program as
soon as September, but might wait longer if the expected
economic growth in the year's second half fails to materialize.
Later in the session, Chicago Fed President Charles Evans
echoed the sentiment when he said the central bank will probably
decrease the program later this year and could do so as early as
next month, depending on the economic data.
Fed officials "are all hedging themselves, which is why the
market continues to just be a little bit confused and why it is
going to churn," said Ken Polcari, director of the NYSE floor
division at O'Neil Securities in New York.
"There is really no reason at the moment for the market to
go higher because it is still too unclear."
One catalyst for Monday's downturn in the Dow and the S&P
500 was provided by Richard Fisher, president of the Federal
Reserve Bank of Dallas. He said he supported scaling back the
central bank's stimulus next month unless economic data takes a
turn for the worse.
The S&P 500's decline on Tuesday was its biggest fall since
June 24 as investors continued to take profits from the recent
rally that drove the Dow Jones industrial average and the
benchmark S&P to back-to-back record closing highs late last
The Dow Jones industrial average fell 93.39 points or
0.60 percent, to end at 15,518.74. The S&P 500 declined
9.77 points or 0.57 percent, to 1,697.37. The Nasdaq Composite
dropped 27.182 points or 0.74 percent, to 3,665.77.
Earlier, the Dow fell as low as 15,473.40, while the S&P 500
touched a session low of 1,693.29, and the Nasdaq hit an
intraday low of 3,654.672.
The S&P 500 has risen for five of the past six weeks,
gaining more than 7 percent over that period.
Volume was light for the second straight day, with about 5.5
billion shares traded on the New York Stock Exchange, NYSE MKT
and Nasdaq, below the daily average of 6.36 billion. The thin
volume exaggerated the market's swings.
Monday marked the lowest volume for a full-day session so
far this year. With major U.S. economic data like the nonfarm
payrolls report and earnings from bellwethers out of the way,
volume is expected to be light throughout the week.
Walt Disney Co posted a slightly higher quarterly
profit that beat Wall Street's expectations, even though its
movie studio earnings declined, in results released after the
closing bell. Disney's stock fell 1 percent to $66.35 in
extended-hours trading. The stock ended regular
trading at $67.05, up 1.6 percent.
During the regular session, the biggest drag on the Dow was
International Business Machines Corp. The stock dropped
2.3 percent to $190.99 after Credit Suisse cut its rating to
"underperform" from "neutral," saying growth would be a
challenge for IBM in the future. Credit Suisse also cut its
price target on the Dow component by $25 to $175. IBM topped the
list of the Dow's 10 worst-performing stocks.
Bank of America shares declined 1.1 percent to close
at $14.64 after the U.S. Justice Department and the Securities
and Exchange Commission filed civil lawsuits against the bank
for what government lawyers said was a fraud on investors
involving $850 million of residential mortgage-backed
securities. The stock was among the Dow's 10
The S&P financial index lost 0.9 percent.
Retailers' shares were among the day's biggest losers.
American Eagle Outfitters shares tumbled 12 percent to
$17.57 a day after the retailer said its second-quarter profit
would be hurt by weak sales and margins. A number of analysts
downgraded the stock. The S&P retail index slipped 0.4
Of the 418 companies in the S&P 500 that had reported
earnings for the second quarter through Tuesday morning, Thomson
Reuters data showed that 67.5 percent have topped analysts'
expectations, in line with the average beat over the past four
quarters. On the revenue side, the data showed that 54 percent
have reported revenue above estimates, more than in the past
four quarters but below the historical average.
Declining stocks outnumbered advancing ones on the NYSE by a
ratio of about 3 to 1, while on the Nasdaq, more than two stocks
fell for every one that rose.