- The Washington Times - Monday, June 21, 2004

NEW YORK (AP) — Investor ennui pushed stocks lower yesterday as Wall Street nervously awaited a key decision on interest rates, the transfer of power in Iraq and next month’s second-quarter earnings.

Until the final hour of trading, the markets saw low volatility, light volume and very little conviction ahead of next week’s Federal Reserve meeting, during which the Fed’s Open Market Committee is expected to decide on an interest-rate increase.

Investors were also looking to the June 30 turnover of power in Iraq, hoping tensions would start to ease there. Many also awaited second-quarter earnings, expected next month.

The Dow Jones Industrial Average fell 44.94, or 0.4 percent, to 10,371.47. The Dow had traded in a narrow range off Friday’s close for most of the day until investor pessimism sent stocks lower at the end of the day.

Broader stock indicators were moderately lower. The Standard & Poor’s 500 Index was down 4.72, or 0.4 percent, at 1,130.30, and the Nasdaq Composite Index lost 12.35, or 0.6 percent, to 1,974.38.

Most investors expected the Fed to make a quarter-percentage-point increase in the benchmark rate, currently at a 43-year low of 1 percent, which some analysts think could prompt a rally through the summer months. The possibility of a half-point raise — or, more unlikely, no increase at all — would likely roil the markets instead of providing a boost to stock prices.

The financial sector continued to see a great deal of merger activity. This time, Wachovia Corp. announced it would purchase rival bank SouthTrust Corp. in a deal valued at $14.3 billion. The deal would give Wachovia a strong footing in the South. Wachovia dropped $1.98 to $45.02, while SouthTrust jumped $4.57, or 13 percent, to $39.37.

Simon Property Group Inc., the largest shopping mall owner, fell 32 cents to $51.98 after it said it would buy Chelsea Property Group, which operates 60 outlet centers and shopping malls, for about $3.5 billion.

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