Wall Street quiet ahead of Fed, P&G slides

Reuters News
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Posted: May 29, 2012 4:31 AM
By Rodrigo CamposNEW YORK (Reuters) - Stocks hovered near break-even in low volume on Wednesday, after four days of gains on the S&P 500, as traders awaited the outcome of the U.S. Federal Reserve's two-day policy meeting.Shares of companies that make consumer products weighed, with blue-chip Procter & Gamble Co down more than 3 percent after it cut its growth forecasts.The Fed is set to announce its monetary policy decision at 12:30 p.m., followed by a press conference with Chairman Ben Bernanke at 2:15 p.m. Many expect the central bank to extend its "Operation Twist," a program aimed at supporting the economy by pushing down longer-term interest rates, thus spurring consumer spending.The S&P 500 has risen about 7 percent from a five-month low hit earlier in June and any disappointment stemming from the Fed's decision could trigger a sharp selloff. The benchmark closed Tuesday above its 50-day moving average for the first time in seven weeks and at its highest since May 10."Everybody's figuring (the Fed is) going to revise unemployment projections up and GDP down, but if they say they're going to extend Operation Twist or do some sort of QE3 or start buying mortgage backed securities aggressively that would be a positive," said Dave Rovelli, managing director of US equity trading at Canaccord Genuity.Markets are expected to be volatile after the statement as traders sift through the specifics and the language used by the Fed.The Dow Jones industrial average shed 4.58 points, or 0.04 percent, to 12,832.75. The S&P 500 Index dipped 1.88 points, or 0.14 percent, to 1,356.10. The Nasdaq Composite edged up 0.37 point, or 0.01 percent, to 2,930.13.European shares edged higher in choppy trading ahead of the Fed announcement. The FTSEurofirst 300 index of top European shares was up 0.3 percent.Procter & Gamble shares fell 3.3 percent to $60.15 after the world's largest household product maker cut its growth forecasts.Adobe Systems slid 4.1 percent to $31.55 after the maker of Photoshop and Acrobat software cut its full-year revenue outlook and warned about weak demand in Europe.Other S&P 500 companies expected to post earnings on Wednesday include Bed Bath & Beyond Inc, Goodrich Corp and Red Hat Inc.(Reporting by Rodrigo Campos, editing by Dave Zimmerman)