By TIM PARADIS AP Business Writer
NEW YORK Oct 24, 2006 (AP)— Stocks seesawed in a narrow range Tuesday as investors awaited the results of this week's Federal Reserve meeting and regrouped after Monday's record-setting session.
The Fed's Open Market Committee was holding a two-day meeting, and while many investors expected the central bank's policymakers to leave interest rates unchanged for the third straight meeting, there was still concern on the Street about the assessment of the economy to be issued Wednesday afternoon.
The Dow Jones industrial average showed a slight decline Tuesday, after surging 114 points Monday to a new record high close; the broader market indexes also posted big gains Monday.
Steve Sachs, director of trading at Rydex Investments, contends that the run-up in the Dow and blue chip stocks in general has occurred too quickly to avoid a pullback. "There's probably good reason for the rally to at least pause here."
In early afternoon trading, the Dow was down 11.36, or 0.09 percent, at 12,105.55. Earlier Tuesday, the Dow set a new trading high of 12,133.80, edging past a day-old record of 12,125.16.
Broader stock indicators fell slightly. The Standard & Poor's 500 index was down 3.76, or 0.27 percent, at 1,373.26, and the Nasdaq composite index was down 17.81, or 0.76 percent, at 2,337.75.
Bonds rose slightly as investors awaited the Fed's decision. The yield on the benchmark 10-year Treasury note fell to 4.82 percent from 4.83 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude was up 59 cents at $59.40 a barrel on the New York Mercantile Exchange. Falling oil prices, which fell to lows for the year last week, have helped drive stocks higher in the last several months.
Sachs expects investors will stop and catch their breath as earnings season winds down and Wall Street receives economic news from the Fed and an advance reading of third-quarter's gross domestic product. The Commerce Department report on the broadest measure of the economy is due Friday. He also contends that the rise in the major indexes has at times occurred with too few stocks driving the advances.