* Materials shares weigh on stimulus uncertainty
* Broadcom rallies after outlook, lifts Nasdaq
* New home sales rise, durable goods orders fall
* Dow off 0.4 pct, S&P off 0.3 pct, Nasdaq up 0.2 pct
* For up-to-the-minute market news see []
(Updates to close)
By Chuck Mikolajczak
NEW YORK, Oct 27 (Reuters) - U.S. stocks fell on Wednesday
as investors dialed back expectations of how aggressively the
Fed would act to stimulate the economy.
With the uncertain outcomes of the U.S. elections and a
Fed meeting next week, traders positioned themselves for more
volatile markets. The CBOE Volatility index <.VIX> rose 2.4
percent and was up for the third consecutive day.
Materials stocks, which have rallied in recent weeks on
expectations of heavy stimulus, were the day's biggest
decliners. The S&P Materials index <.GSPM> lost 0.9 percent.
In recent sessions,investors reduced their bets on the
size and timetable of the Fed's potential purchases of
Treasury debt. The Wall Street Journal furthered those
expectations after reporting the Fed hoped to avoid a "shock
and awe" approach. For details, see []
"People are using that as a reason to take profits after
what has been a very strong couple of months for equities,"
said Tim Holland, co-portfolio manager of Aston/TAMRO
Diversified Equity Fund in Alexandria, Virginia.
Among the materials sector's biggest percentage decliners,Freeport McMoRan Copper & Gold Inc <FCX.N> slumped 2.8 percent
to $95.50, and AK Steel Holding Co <AKS.N> dropped 3.4 percent
to $12.40.
The rise in volatility suggests growing caution among
investors. TD Ameritrade chief derivatives strategist Joe
Kinahan said investors have been hedging gains through use of
options in equity index and exchange-traded funds.
"They don't necessarily want to be out of their current
positions," Kinahan said. "By buying protection and hedging
recent gains against their current positions, investors now
have the ability to pull the cord on the downside."
The Dow Jones industrial average <> dropped 43.18
points, or 0.39 percent, to 11,126.28. The Standard & Poor's
500 Index <.SPX> lost 3.19 points, or 0.27 percent, to
1,182.45. But the Nasdaq Composite Index <> gained 5.97
points, or 0.24 percent, to 2,503.26.
The Nasdaq advanced as Broadcom Inc<BRCM.O> jumped 11.7
percent to $41.56 a day after it unexpectedly forecast a
potential rise in fourth-quarter revenue. []
Consumer products maker Procter & Gamble Co's <PG.N>
quarterly profit beat expectations, helped by strength in
emerging markets. The Dow component rose 0.4 percent to
$63.08. []
The day's economic data was mixed, with sales of new U.S.
single-family homes rising more than forecast in September,
while demand for durable goods, excluding aircraft,
unexpectedly fell in the same month. []
U.S.-listed shares of Argentine companies surged following
reports of the death of Nestor Kirchner, the country's former
president. Kirchner, who was also the husband of Argentina's
current president and viewed as a contender for the post in
next year's election, was perceived as unfriendly to big
business. []
The ADRs of Transportadora de Gas Del Sur SA <TGS.N>, the
operator of Argentina's dominant natural gas pipeline system,
soared 9.6 percent to $4.35, while IRSA Investments and
Representations Inc <IRS.N> jumped 7.6 percent to $14.98.
Volume was light, with about 7.8 billion shares traded on
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, below the year-to-date moving average of 8.75 billion.
Declining stocks outnumbered advancing ones on the NYSE by
a ratio of about 2 to 1, while on the Nasdaq, eight stocks
fell for every five that rose.
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)
