WKYT | Lexington, Kentucky | News

Stocks Head For Lower Open Ahead Of Fed Meeting

By MADLEN READ
AP Business Writer

NEW YORK (AP) - U.S. stocks headed for a lower opening Tuesday, as investors winced at rising oil prices and a UPS Inc. profit warning ahead of the Federal Reserve's rate-setting meeting.

Energy prices show few signs of waning, leading to worries on Wall Street that high fuel costs will prevent the economy from growing and aggravate inflation at the same time. Light, sweet crude rose 67 cents to $137.41 a barrel in premarket electronic trading on the New York Mercantile Exchange.

UPS Inc. pointed to elevated fuel costs late Monday as a major reason why the world's largest shipping carrier ratcheted down its second-quarter profit expectations. UPS shares fell 3.5 percent in after-hours trading Monday.

Fed policymakers are meeting Tuesday and Wednesday, and will announce Wednesday afternoon their decision to change or hold the key federal funds rate steady at 2 percent. With the economy weak and price pressures rising, the central bank is in a tough spot - if rates are low, the economy has more chance to expand, but inflation can accelerate, too.

Dow Jones industrial average futures fell 43, or 0.36 percent, to 11,788. Standard & Poor's 500 index futures fell 6.70, or 0.51 percent, to 1,311.60, and Nasdaq 100 index futures fell 12.75, or 0.66 percent, to 1,905.25.

Government bonds rose ahead of the market's open. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slid to 4.15 percent from 4.17 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.

In economic data, the S&P/Case-Shiller index of U.S. home prices fell in April at fastest pace since 2000.

Later, at 10 a.m. Eastern time, the Conference Board releases its index of June consumer confidence. Economists, on average, expect the index to show a decline.

In corporate news, NYSE Euronext, the operator of the New York Stock Exchange, said it will pay $250 million for a 25 percent stake in Qatar's Doha stock market.

Overseas, Japan's Nikkei stock average fell 0.61 percent. In midday trading, Britain's FTSE 100 fell 1.00 percent, Germany's DAX index fell 1.33 percent, and France's CAC-40 fell 1.00 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com

(Copyright 2008 by The Associated Press. All Rights Reserved.)


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