Stocks edge lower as investors focus on the Fed

Topics: From the Wires,

Stocks edge lower as investors focus on the FedTrader Edward Baumann, right, works on the floor of the New York Stock Exchange Wednesday, June 20, 2012. Stocks edged lower early Wednesday after investors saw signs that economies could be slowing down in both the West and China. (AP Photo/Richard Drew)(Credit: AP)

Stocks edged down at midday Wednesday as investors looked for direction from a Federal Reserve announcement expected in the afternoon.

The Fed could keep buying long-term bonds to keep rates low. Failing that, it might signal that it’s ready to act if the economy sputters. A statement from the Fed was expected at 12:30 p.m. Eastern Time.

Shortly after noon, the Dow Jones industrial average was down 22 points at 12,815. The Standard & Poor’s 500 index fell three points to 1,355. The Nasdaq composite index fell one point to 2,928.

Randy Warren, chief investment officer for Warren Financial Service, lamented the focus on the Fed, saying investors should be thinking about where to put their money considering Europe’s problems and a weak euro. He favors American companies who mostly do business in the U.S.

“There’s plenty to choose from for investors,” he said. “They just have to think more than five minutes ahead.”

Some of the same weakness that is being addressed by the Fed has forced Procter & Gamble to reign in recent price increases as people cut back on spending.

Procter & Gamble, the world’s largest consumer products maker, predicted continued slow growth in developed markets and slower growth in China. The company cut its estimates for fourth-quarter revenue and income. The stock dropped $2.07, 3.3 percent, to $60.14, making it the biggest decliner in the Dow Jones industrial average.

Consumer spending accounts for about 70 percent of all economic activity in the U.S. With few companies hiring, the weak forecast from P&G was a worrisome sign that one of the country’s most important economic engines may be weakening. P&G makes Tide detergent, Pampers diapers and Duracell batteries.

Eight of the 10 sectors in the S&P 500 declines, with only technology stocks and financials rising.

Next week, new figures on personal income and consumer sentiment will be released. The reports could signal more retrenchment by the U.S. consumer.

Actuant Corp., which makes industrial products, fell $1.62, or 4.6 percent to $26.19 after predicting “uneven end market demand, notably in Europe and China.” The company predicted revenue for its current and next fiscal years will be less than analysts had been expecting.

Adobe Systems dropped $1.15 to $31.74, a loss of 3.5 percent. The software maker, whose products include Adobe Reader and Photoshop, issued a profit forecast late Tuesday that was weaker that analysts were expecting. Its income for the latest quarter fell 2 percent on higher expenses.

La-Z-Boy plunged almost 12 percent after its earnings per share came in far below what analysts were expecting. The stock lost $1.54 to $11.59.

Markets in Europe rose and the euro strengthened against the dollar. Benchmark stock indexes rose 0.5 percent in Germany, 0.6 percent in Britain and 2.1 percent in Italy.

Borrowing costs fell in Europe, too. Yields on government bonds in Spain and Italy fell, a signal that investors are less worried about the finances of those two countries.

The yield on the benchmark 10-year Treasury note rose to 1.66 percent from 1.62 percent the day before as investors moved money out of low-risk assets.

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