Wall Street little changed as Fed, ECB awaited

NEW YORK (Reuters) - U.S. stocks were little changed on Tuesday as investors held off making big bets before the conclusion of the Federal Reserve's two-day policy meeting, which may result in additional action to stimulate the economy.

Equities in the United States and Europe have rallied recently, with U.S. stocks mostly flat on Monday as investors paused following the best two-day run this year, on increased expectations both the Fed and the European Central Bank will plan further actions to stimulate their respective economies at meetings this week.

Last week, ECB President Mario Draghi said the ECB was ready to do whatever it takes to preserve the euro, fueling expectation the bank could revive its bond purchase program to help lower the borrowing costs of debt-stricken Spain and Italy.

"This move higher that we've seen is directly tied to the markets' expectations there would be further Fed easing and Draghi will be in very much lockstep coordination with the Fed in terms of trying to ease our way out of this predicament," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"Draghi lit the fuse but the ball is now in Chairman Bernanke's court."

The Dow Jones industrial average dropped 32.24 points, or 0.25 percent, to 13,040.77. The Standard & Poor's 500 Index lost 2.82 points, or 0.20 percent, to 1,382.48. The Nasdaq Composite Index shed 1.12 points, or 0.04 percent, to 2,944.72.

Government data showed consumer spending fell in June for the first time in nearly a year when accounting for inflation, while household income rose 0.5 percent.

The S&P/Case-Shiller composite index of 20 metropolitan areas gained 0.9 percent in May on a seasonally adjusted basis, topping economists' expectations for a 0.5 percent gain and suggested the recovery in the housing market continues to gain traction.

In the final piece of economic data for the session, consumer confidence unexpectedly rose in July to 65.9 versus expectations of 61.5 as Americans were more optimistic about the short-term outlook than they were about their current conditions.

Pfizer Inc shares climbed 1.3 percent to $24.02 the largest U.S. drugmaker reported higher-than-expected quarterly earnings and affirmed its 2012 profit forecast.

Coach Inc slumped 14.9 percent to $51.55 as the worst performer on the S&P 500 after the upscale leather goods maker reported lower-than-expected fourth-quarter sales. The S&P consumer discretionary index dropped 0.8 percent.

Anheuser-Busch InBev , the world's largest brewer, fell short of second-quarter earnings expectations, selling less beer and spending more on distribution and marketing new U.S. brands. U.S.-listed shares fell 2.6 percent to $78.

Aetna Inc posted weaker quarterly earnings as expenses rose, but the results were still higher than analysts had expected. Shares of the No. 3 U.S. health insurer advanced 0.5 percent to $37.34.

Companies expected to report earnings after the close include Electronic Arts and FMC Corp .

According to Thomson Reuters data through Tuesday morning, of the 303 companies in the S&P 500 that have reported earnings to date for Q2 2012, 66 percent have reported earnings above analyst expectations. The average over the past four quarters is 68 percent.

(Reporting by Chuck Mikolajczak, editing by Dave Zimmerman)

Source: http://news.yahoo.com/wall-st-opens-flat-ahead-fed-meeting-133713970--finance.html

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