The Wall St. street sign is photographed in front of the American flag hanging on the New York Stock Exchange prior to a NYC Central Labor Council rally for worker protections, Thursday, Sept. 25, 2008 in New York. (AP Photo/Mary Altaffer)
NEW YORK – Wall Street took some money off the table Wednesday after its huge rally a day earlier, as investors awaited an afternoon decision on interest rates from the Federal Reserve.
The market expects policymakers to lower the fed funds rate by a half point to 1 percent, though there has been speculation that smaller or wider cuts are possible.
The only certainty is that Wall Street will pore over the Fed's statement on its decision and its reading of the economy. That assessment, along with any move on rates themselves, could lead the market to retreat, rally or simply shrug off a move that it writes off as expected.
Stocks' early decline Wednesday was not surprising given the 889-point gain logged by the Dow Jones industrials Tuesday. The Dow and the Standard & Poor's 500 index posted gains of nearly 11 percent, while the Nasdaq composite index rose 9.5 percent as investors, confident about the prospects for a rate cut, piled into the market to pick up stocks that have become bargains.
The Dow's gain was its second-largest daily point gain; the biggest was its 936-point surge on Oct. 13 that later evaporated as fears about the economy grew. The stock market has been extremely volatile lately — beyond a simple case of investor indecision, the market's back-and-forth moves may also be part of its attempt to establish a bottom.
The Dow fell 41.10, or 0.45 percent, to 9,024.02.
Broader stock indicators also declined. The S&P 500 index fell 6.34, or 0.67 percent, to 934.17, and the Nasdaq composite index fell 16.63, or 1.01 percent, to 1,632.84.
A surprise gain in orders for big-ticket manufactured goods was not enough to maintain upward momentum in premarket trading. The Commerce Department reported that orders for durable goods — items such as cars, appliances and machinery expected to last at least three years — rose 0.8 percent in September. Orders were expected to fall 1.5 percent.