Stocks little changed ahead of Fed By JOE BEL BRUNO, AP Business Writer

Stocks little changed ahead of Fed By JOE BEL BRUNO, AP Business Writer
18 minutes ago



NEW YORK - Wall Street was little changed Tuesday as investors avoided big bets before the Federal Reserve's meeting during the afternoon, and braced for anything policymakers might say about the debt market.

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The August meeting of the Fed's Open Market Committee, which sets short-term interest rates, follows two weeks of volatile stock trading. Investors have been uneasy about the availability of credit, and the health of subprime loans made to borrowers with weak credit.

While observers don't expect the Fed will move the benchmark rate from 5.25 percent, where it has been since last summer, many will be looking to the central bank's economic policy statement for comments about the lending concerns that have prompted big swings in stocks and bonds.

Wall Street was also digesting a Labor Department report that found the productivity of U.S. workers rose to a 1.8 percent annual rate in the spring — more than double the 0.7 percent pace of the first quarter — while wage pressures lessened.

Unit labor costs rose at a 2.1 percent pace, which was the second straight quarter in which wage pressures have cooled. A drop in wage pressures could help assuage some of the Fed's concerns about inflation.

In midday trading, the Dow Jones industrial average was down 16.18, or 0.12 percent, at 13,452.60 after soaring 286 points Monday, the latest in a series of triple digit swings the blue chips have made amid investors' ongoing uneasiness about credit. The Dow was down more than 100 in the early going Tuesday.

The Standard & Poor's 500 index rose 1.31, or 0.09 percent, to 1,468.98, and the Nasdaq composite index fell 1.90, or 0.07 percent, to 2,545.43.

In recent weeks, the major stock market indexes have traded erratically, with the Dow routinely showing triple-digit swings. The frenetic trading follows the stock market's high seen July 19, when the Dow closed above 14,000 for the first time and the Standard & Poor's 500 index also saw a record finish.

Bond prices, which move opposite yields, fell Tuesday. The yield on the benchmark 10-year Treasury note was unchanged at 4.74 percent. Bonds fell sharply Monday amid the stock market rally.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 38 cents to $71.68 on the New York Mercantile Exchange a day after tumbling more than 4.5 percent. A week ago, crude closed at a record $78.21 a barrel.

In corporate news, Marsh & McLennan Cos. fell $1.36, or 4.6 percent, at $26.38. The largest U.S. insurance brokerage, turned in a 3 percent increase in its second-quarter profits amid growth in its risk and insurance business and consulting operations. The company also approved a $1.5 billion share-repurchase plan.

Duke Energy Corp. rose 40 cents, or 2.2 percent, to $18.30 after it reported second-quarter profit fell $1.27 percent after it spun off its natural gas business at the beginning of the year.

Tyco International Ltd. shed $1.25, or 2.6 percent, to $46.75 after it fell to a fiscal third-quarter loss due to hefty charges primarily related to a legal settlement. However, adjusted results managed to top Wall Street's expectations.

Among the companies reporting results Tuesday, Cisco Systems Inc. is expected to weigh in after the closing bell. Shares fell 19 cents to $29.31.

The Russell 2000 index of smaller companies rose 1.07, or 0.14 percent, to 767.46.

Declining issues outpaced advancers by a 6 to 5 basis on the New York Stock Exchange, where volume came to 638.2 million shares.

Overseas, European markets rose higher following Monday's U.S. advance. London's FTSE 100 rose 1.14 percent, Germany's DAX index rose 0.66 percent, while France's CAC-40 rose 1.37 percent. Japan's Nikkei stock average closed up 0.04 percent.

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