By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks closed the volatile
session lower on Tuesday as markets digested a slew of economic
data and focused on the Federal Reserve's upcoming decision on the
fate of the stimulus program.
Indexes attempted to break higher in the afternoon and briefly
succeeded, but sold off in the last hour. Dow Jones Industrial
Average (DJI) closed down nine points to 15,875.26. The S&P 500
index (SPX) closed 5 points, or 0.3% lower to 1,781.00. The
benchmark index was down five days out of past six sessions. Nasdaq
Composite (RIXF) was down six points, or 0.1, to 4,023.68.
Main indexes rose during the previous session buoyed by positive
economic data showing improving business activity across the
country.
"After a big run in recent months and a small correction last
week, markets are now reflecting on the outcome of the Fed
meeting," said Colin Cieszynski, senior market analyst at CMC
Markets.
"Markets have priced in a 10% chance of a December taper, but
most analysts do not think it will happen until early next year.
Even if they decide to start the taper in December it will be
modest, so the Fed can test the waters. While unemployment figures
may warrant it, inflation is still below what the Fed would like it
to be," he added.
Investors digested a slew of economic data to assess how and
when the Fed will decide to begin reducing its $85 billion a month
stimulus program, which added more than $1 trillion to its balance
sheet over the past year. The Fed is expected to announce its
decision on Wednesday afternoon.
Prices of consumer goods did not change from the previous
months, leaving the inflation rate on the annualized base at 1.2%,
still below the Fed target, making its decision to start the taper
sooner rather than later more difficult. The U.S. current-account
deficit narrowed to $94.8 billion in the third quarter, marking the
lowest level since Fall 2009, the government said Tuesday.
* Movers and shakers
* Shares of Facebook Inc. rose 2% after The Wall Street Journal
reported the social network will begin selling video advertisements
later this week.
* Shares in Frontier Communications Corporation jumped 8.6%
after the company announced a deal to buy AT&T's wireline
residential and business services and associated assets in
Connecticut in an all-cash transaction.
* Campbell Soup Co shares marched upwards today, gaining 4.5%,
seemingly after Bloomberg reported that the maker of canned soups
may be a target for takeover by Warren Buffett's Berkshire
Hathaway.
* Boeing Co. shares rose 0.9% after the company said late Monday
it would boost its quarterly dividend by 50% and its board approved
$10 billion to repurchase outstanding shares, which will be added
to what's left of a 2007 buyback plan.
* Shares in 3M Company rose 2.9% after the maker of Scotch tape
and Post-it Notes said it was raising its quarterly dividend by
35%.
* Shares of KKR Financial Holdings jumped 30.9% after a
late-Monday announcement that KKR & Co. would acquire it for
$2.6 billion in an all-stock deal. Shares of KKR & Co. dropped
1.1%.
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