* Fed starts two-day meeting
* Producer Price Index rises
* GE gives flat outlook for 2010
* Dow off 0.5 pct, S&P off 0.6 pct, Nasdaq off 0.5 pct
* For up-to-the-minute market news, click []
(Adds Adobe's gain after the bell and Best Buy's slide in
regular trading)
By Chuck Mikolajczak
NEW YORK, Dec 15 (Reuters) - U.S. stocks fell on Tuesday,
with the Dow and S&P 500 moving off 14-month highs, as a climb
in producer prices raised inflation concerns and economic
bellwether General Electric issued a flat outlook for 2010.
Tuesday's slide broke a four-day winning streak for both
the Dow industrials and the S&P 500.
Investors trimmed positions a day ahead of Wednesday's
decision on interest rates from the Federal Reserve, reflecting
their reluctance to place big bets before getting the central
bank's latest assessment of both the economy and monetary
policy.
A higher-than-expected increase in the overall U.S.
Producer Price Index in November raised concerns that the Fed
may find it difficult to keep benchmark rates at their current
level near zero. For details, see []
General Electric Co <GE.N>, considered an indicator of the
U.S. economy's health, pushed stocks lower in the latter part
of the session after the diversified manufacturer issued a
cautious outlook for 2010.
GE said its industrial and capital finance profits will
likely be flat next year and revenues overall are expected to
drop between 5 percent and 10 percent. GE's stock, a Dow
component, slid 1.3 percent to $15.75. []
Although the market does not anticipate any changes in the
Fed's current policy of holding U.S. interest rates near zero,
even a slight change in the Fed's tone could make an impact on
investor sentiment as cheap money has been one of the main
agents of the stock market's rally. []
"The PPI data was a little bit worrisome and maybe just
whatever comes out of the Fed -- there might be a little bit of
concern about that," said Wayne Schmidt, chief investment
officer of Gradient Investments in Minnesota.
"The equity market has had a fairly good run here, and may
be getting just a little bit tired here, approaching year
end."
The Dow Jones industrial average <> dropped 49.05
points, or 0.47 percent, to end at 10,452.00. The Standard &
Poor's 500 Index <.SPX> fell 6.18 points, or 0.55 percent, to
1,107.93. The Nasdaq Composite Index <> lost 11.05 points,
or 0.50 percent, to 2,201.05.
The S&P 500 is up more than 60 percent from a 12-year
closing low in March. But the stock market has slowed its
advance in recent weeks with thin volume, as traders look to
lock in year-end profits and seek clues about stocks' direction
for 2010.
The Fed's two-day policy-setting meeting started at 2
p.m.(1800 GMT); it will conclude with a statement on the
economy expected on Wednesday around 2:15 p.m. (1815 GMT).
[]
After the closing bell, Adobe Systems Inc <ADBE.O> edged up
0.1 percent after the design software maker posted lower
quarterly profit and sales, although it topped Wall Street's
estimates. [] On Nasdaq, the stock closed at
$36.36, up 1.6 percent.
During the regular session, Best Buy Co <BBY.N> shares
tumbled 8.5 percent to close at $41.53 on the New York Stock
Exchange. Best Buy, the top U.S. electronics retailer, reported
better-than-expected quarterly profit, but issued a tepid gross
margin outlook for the holidays. []
The New York-listed shares of Credit Suisse <CS.N><CSGN.VX>
fell 3.4 percent to $48.23 after the Swiss banking company said
it is probably going to pay Washington $536 million to settle a
U.S. probe into payments made between 2002 and 2007 involving
countries and entities that face economic sanctions from the
United States.
By law, U.S.-regulated financial institutions cannot do
business with certain countries, including Iran and Sudan.
Closing its office in Tehran was among the steps that Credit
Suisse has taken to resolve the matter, the company said.
On Wednesday, investors also will focus on the Consumer
Price Index for November, for a more detailed picture of
inflationary pressures. Overall CPI is forecast to have risen
0.4 percent in November, compared with a 0.3 percent increase
in October, according to economists polled by Reuters.
Boeing Co <BA.N> shares slipped 0.7 percent to $55.67 after
the airplane manufacturer's troubled Dreamliner jet took off on
a runway following two years of delays, although the flight was
cut short due to weather. []
Crude oil <CLc1> gained 1.7 percent, or $1.18, to settle at
$70.69 a barrel, boosting shares of energy and materials
companies. The PHLX Oil Service Sector index <.OSX> rose 1.4
percent.
The U.S. dollar strengthened against the euro, and the
dollar index <.DXY> rose 0.8 percent, touching its highest
level in 2-1/2 months.
In recent weeks, the connections among stocks and the
dollar, oil and gold have loosened, with those asset classes
trading more independently of one another.
For an illustration of those assets in 2009, see
http://graphics.thomsonreuters.com/129/US_DGSPB1209.gif
Volume was light on the New York Stock Exchange, with 1.18
billion shares changing hands, below last year's estimated
daily average of 1.49 billion, while on the Nasdaq, about 1.98
billion shares traded, short of last year's daily average of
2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by
a ratio of about 3 to 2, while on the Nasdaq, about eight
stocks fell for every five that rose.
(Editing by Jan Paschal)
