Stock prices slip in early trading

Stock prices slip in early trading

	Published : Tue, 28 Aug 2007 14:51 By : Agencies Print this Story

NEW YORK (AP) - Stock prices are lower in early trading today as Wall Street cautiously awaited minutes from the Federal Reserve's Aug. 7 meeting, that could provide insight into whether it may cut rates. The Dow Jones industrial average is down 42.39 to 13,279.74.

The Nasdaq Composite Index has dropped 14.31 to 2,546.52 and the Standard & Poor's 500 index is off 5.93 at 1,460.86.

At the central bank's last meeting, policymakers held rates steady and said that although tight credit and the housing market may drag on the economy, inflation remains its predominant concern. The market has since tumbled further from record levels of mid-July and the Fed, raising worries about the market turmoil's effect on the economy, lowered the rate it charges banks for loans.

Although the Fed has indicated since the meeting it will take the steps needed to contain damage to the economy from market turbulence, investors nonetheless may shudder if the Fed's minutes suggest it is unwilling to waver in its stance against inflation.

Before the market opened, the mood was pessimistic, after Dow Jones Newswires reported that a Merrill Lynch analyst downgraded Citigroup Inc., Lehman Brothers Holdings Inc. and Bear Stearns Cos. The downgrades appeared to offset enthusiasm over Berkshire Hathaway Inc. boosting its stake in railroad company Burlington Northern Santa Fe Corp. and Medco Health Solutions Inc. saying it will buy diabetes treatment supplier PolyMedica Corp. for $1.5 billion in cash.

Also keeping alive credit worries, a Standard & Poor's housing index showed that U.S. home prices in the second quarter posted the sharpest decline since 1987, when the index was started. When home prices fall, owners have a hard time refinancing, which can lead to more defaults and delinquencies.

On Monday, the stock market retreated from last week's strong gains after a report said sales of existing homes slipped in July for a fifth straight month to their slowest pace in nearly five years.

Bonds were flat Tuesday, with the yield on the benchmark 10-year Treasury note at 4.57 percent, the same as late Monday. The dollar slipped against most other major currencies, while also gold prices fell.

Light, sweet crude fell 30 cents to $71.67 a barrel in premarket electronic trading on the New York Stock Exchange.

In Asian trading, Japan's Nikkei stock average fell 0.09 percent, while China's Shanghai Composite Index gained 0.87 percent to another record.

In afternoon European trading, Britain's FTSE 100 fell 0.95 percent, Germany's DAX index fell 0.35 percent, and France's CAC-40 fell 1.13 percent.