Stocks fall as investors await Fed's next interest rate move

April 27, 2005

NEW YORK - Nervous investors bid stocks lower yesterday as conflicting economic data prompted them to pull money out of the market ahead of next week's Federal Reserve decision on interest rates.

With Wall Street concerned about inflation and the Fed's interest rate policy, the Commerce Department's report showing a surprise jump in new-home sales last month assuaged fears that higher rates would curtail consumers' willingness to buy homes. And oil prices also fell one day after reaching the $56 level, further easing fears that inflation might take hold.

But a drop in consumer confidence to its lowest level in five months worried investors, and many remained on the sidelines in the hopes that the Fed next week could provide clarity on the economy.

"In a way, this week is kind of a wash, because everyone is going to be holding their breath for the Fed," said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers in Boston.

The Dow Jones industrial average fell 91.34, or 0.9 percent, to 10,151.13. The Standard & Poor's 500 index was down 10.36, or 0.9 percent, at 1,151.74, and the Nasdaq composite index lost 23.34, or 1.2 percent, to 1,927.44. The Russell 2000 index of smaller companies was down 8.78, or 1.5 percent, at 587.66. The Dow Jones Wilshire 5000 composite index, the broadest measure of U.S. stocks, fell 99.77 to 11,347.59.

The Sun-Bloomberg index of the top stocks in Maryland dropped 1.62 to 293.43.

Oil prices retreated for a second session, with a barrel of light crude settling at $54.20, down 37 cents, on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 0.3 percent; Britain's FTSE 100 closed down 0.4 percent; France's CAC-40 was flat; and Germany's DAX lost 0.3 percent.

The Associated Press and Bloomberg News contributed to this article.

NATIONALLY

Genentech Inc.

Shares of the biotech company climbed $3.12 to $72.55 after it said the latest studies of its breast cancer drug Herceptin were halted early because the drug showed great promise in halting early-stage cancers.

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