Wall Street flat ahead of Fed statement; P&G drags

Reuters News
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Posted: May 29, 2012 4:31 AM
Wall Street flat ahead of Fed statement; P&G drags
By Chuck MikolajczakNEW YORK (Reuters) - Stocks were little changed on Wednesday after a four-day run of gains as investors awaited the conclusion of the U.S. Federal Reserve's two-day policy meeting.The Fed is set to announce its monetary policy decision at 12:30 p.m. and many economists expect the central bank to extend its "Operation Twist," a program aimed at pushing down longer-term interest rates in an attempt to support the economy.The S&P 500 has advanced in four straight sessions on hopes for an extension of stimulus measures not only from the Fed but from European policymakers as well, pushing the benchmark index to its highest level since May 10 and above its 50-day moving average for the first time in seven weeks."There is a pretty high level of uncertainty as to what they are going to do," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York."The consensus is they are going to extend Operation Twist but it is by no means a certainty and everybody wants to wait and see what the decision is going to be."Greek parties reached a deal to form a conservative-led coalition and said they would start immediately to form a team to re-negotiate the tough austerity conditions in the international bailout propping up the near-bankrupt economy.Europe won support from world leaders on Tuesday for an ambitious but slow-moving overhaul of the euro zone, even as pressure built in financial markets for quicker solutions to its debt crisis that threatens the world economy.European shares steadied near one-month highs in choppy trading ahead of the Fed announcement. The FTSEurofirst 300 index of top European shares was up 0.04 percent.The Dow Jones industrial average slipped 6.43 points, or 0.05 percent, to 12,830.90. The Standard & Poor's 500 Index shed 0.80 points, or 0.06 percent, to 1,357.18. The Nasdaq Composite Index lost 0.84 points, or 0.03 percent, to 2,928.92.Procter & Gamble Co forecast annual earnings for its coming fiscal year would be between flat and up by a mid-single digit percentage amount, with underlying sales set to show a 2 to 4 percent increase. Shares fell 2.9 percent to $60.40 as the biggest drag on both the Dow Industrials and S&P 500 indexes.PepsiCo slipped 0.4 percent to $69 after the company said it sees unfavorable exchange rates hurting 2012 profit more than the maker of Frito-Lay snacks, Quaker oatmeal and Tropicana orange juice had previously expected."All these guys that have global exposure, some are doing better than others, but they are all feeling the headwinds," said Cummins Catherwood, managing director at Boenning and Scattergood in West Conshohocken, Pennsylvania.Adobe Systems Inc slumped 6.9 percent to $30.63 after the maker of Photoshop and Acrobat software cut its full-year revenue outlook as weak demand in Europe could affect sales of the recently launched versions of its popular design software.Other S&P 500 companies expected to post earnings on Wednesday include Bed Bath & Beyond Inc, Goodrich Corp and Red Hat Inc.(Reporting By Chuck Mikolajczak, editing by Dave Zimmerman)