Stocks Pare Losses, as Tech Rises; Verizon Falls

Stocks pared losses and turned mixed, with the tech-heavy Nasdaq moving slightly higher, as traders awaited minutes from the Federal Reserve's latest policy meeting as well earnings from Intel.

The Dow Jones Industrial Average fell more than 20 points to below 11,0000, pulling back from an earlier drop of more than 70 points, a day after a lackluster sessionthat ended with the blue-chip index just 3 points higher.

Verizon, Wal-Mart and Walt Disney were the top laggards on the Dow, while American Express rose.

The S&P 500 fell slightly, while the Nasdaq rose. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 19.

Among the key S&P 500 sectors, energy, utilities and industrials fell, while technology and banks rose.

Stocks may be under some pressure from the dollar, which rose against the euroand a basket of currencies on Tuesday.

The Federal Open Market Committee will release details of its September meeting at 2 p.m. With many market watchers expecting another round of asset buying from the central bank in the coming months, the minutes could provide key details on the Fed's strategy. Many expect the Fed to buy about $500 billion in assets at the Fed's next meeting on Nov. 2-3.

Some market participants may be pulling back Tuesday out of concern the Fed won't step in as aggressively as anticipated, or as soon, said Jim Paulsen, a strategist at Wells Capital Management.

Also, earnings season "always gives people pause until we get a read on that," Paulsen said.

Paulsen, however, believes the market's recent rally has more to do with strengthening economic data than the potential for the Fed to act.

"I think some of the economic reports have caused us to challenge the top of the trading range," he said.

Shares of Avon Products jumped on a report that L'Oreal , the French cosmetics company, may bid for the company with cash.

King Pharamceuticals shares soared more than 35 percent after news the company will be acquiredby Pfizer for $3.6 billion in cash.

Verizon shares sank more than 2 percent after the wireless company was downgraded by Sanford Bernstein to "underperform" from "market perform," citing a "stretched valuation" and risk to the company's future dividend coverage. Rival AT&T , meanwhile, was flat despite Bernstein's conclusion the wireless firm would have no trouble covering its dividend.

Dupont was slightly lower despite being raised to "buy" from "neutral" by Bank of America Merrill Lynch.

American Express, however, was one of the few Dow components to rise after SunTrust Robinson Humphrey raised the company's stock to "buy" from "neutral."

Fastenal fell more than 5 percent despite reporting a 58 percent jump in third-quarter profit to $75 million, or 51 cents a share, up from $47.6 million or 32 cents a share a year earlier.

Caution was expected in the technology sector ahead of Intel'searnings, which will be released after the close today.

Also pressuring the sector, SanDisk and Micron were loewr after the president of Samsung's chip business said the global memory chip market is likely to be weak through the first half of 2011.

Energy stocks slumped across the board, led by Cabot Oil & Gasand Peabody Energy , as oil slid below $82 a barrel. Ascent Solar Technologies , however, soared after the thin-film solar company signed a distribution agreement with a company in the Czech Republic.

Starbucks , meanwhile, jumped more than 4 percent after a Sanford Bernstein analyst the coffee retailer's consumer products business, led by Via, should boost growth.

Also in earnings news, railroad company company CSX will report after the bell.

In economic news, further clues on the directio nof Fed policy could be gleaned at a speech from Kansas City Fed President Thomas Hoenig at 11:45 a.m. Hoenig will speak on the economic outlook and monetary policy from a National Association for Business Economics meeting in Denver, Colorado.

Meanwhile, small business owners surveyed by the National Federation of Independent Business were slightly more optimistic in September, although more plan to cut jobs than hire new workers. The NIFB pptimism index edged up 0.2 points to 89.0.

In China, the central bank increased its required reserve ratiofor financial institutions to stem excessive lending by the nation's leading banks.

European shares were lower across the board with mining companies leading the decline on weaker metal prices. Asian stocks closed mostly in the red, but Chinese stocks saw a boost.

European Central Bank President Jean-Claude Trichet is scheduled to speak at the Economic Club of New York at 12:15 p.m.

At 1 p.m. the results of a $32 billion sale of 3-year Treasury notes will be available.

Coming Up This Week:
TUESDAY: Employment trends index; employment optimism index; Kansas City Fed Pres Hoenig speaks; CFTC hearing on high frequency trading and flash crash; 3-year note auction; FOMC meeting minutes; P&G shareholder meeting; Earnings from Intel and CSX
WEDNESDAY: Weekly mortgage applications; import & export prices; 10-year note auction; Richmond Fed Pres Lacker speaks; Earnings from JPMorgan
THURSDAY: International trade; PPI; weekly jobless claims; oil inventories; 30-year bond auction; Minnesota Fed Pres Kocherlakota speaks; OPEC meeting; Earnings from Google and AMD
FRIDAY: Atlanta Fed Pres Lockhart speaks; Bernanke speaks; CPI; retail sales; Empire State mfg survey; consumer sentiment; credit card default rates reported; Earnings from GE and Mattel

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