Stocks waver as investors await Fed statement

NEW YORK — A moderate improvement in home sales wasn’t enough to get the stock market going again.

Stocks traded mixed but in a narrow range Tuesday after the National Association of Realtors said May sales of existing homes rose 2.4 percent. The increase was smaller than economists’ forecast for 2.8 percent, and not enough to alleviate investors’ anxiety about economic reports later in the week on durable goods orders, new home sales and personal spending.

Traders were also holding back ahead of the Federal Reserve’s decision on interest rates due Wednesday afternoon. Stocks often shuttle around in a narrow range when investors are waiting for the central bank to weigh in on the economy.

“There’s not a lot of conviction on behalf of buyers,” said Jim Herrick, manager of equity trading at Baird & Co.

“The market has priced in good second-quarter earnings, and priced in the economy moving out of recession by the fourth quarter,” Herrick said. “If you see any data that refutes that, the market will head lower.”

The Fed is widely expected to keep its key interest rate near zero after its two-day meeting concludes, but investors are unsure how optimistic the policymakers will be in their economic assessment, and whether the central bank will consider raising rates later this year to curb inflation.

Meanwhile, the Treasury Department plans to auction $104 billion in government debt this week. The Treasury sold $40 billion in debt Tuesday afternoon and demand was strong. Investors have been on edge during such auctions because any signs that demand for government debt is waning could hit the market.

Treasury demand needs to stay strong for the government to finance its bailout and stimulus programs without significantly raising yields. Bond yields affect borrowing rates for consumers.

In late afternoon trading, the Dow Jones industrial average fell 11.64, or 0.1 percent, to 8,327.37. The Standard & Poor’s 500 index rose 2.49, or 0.3 percent, to 895.53, and the Nasdaq composite index rose 2.08, or 0.1 percent, to 1,768.27.

The biggest loser among the 30 Dow stocks was Boeing Co., which fell $2.92, or 6.2 percent, to $43.98 after again delaying the first test flight of its long-awaited 787 jetliner. The company said it needed to reinforce part of the aircraft.

The stock market rallied sharply between early March and early June, and has given up some ground over the past several days. The Dow on Monday shed 201 points, the worst daily drop in more than two months.

The recent selloff, however, has brought very little volatility, and that’s a positive sign, said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York.

“The fact is, you can’t keep going straight up,” Fullman said. “There’s a chance we’ll still see some downward movement in the next week or two — the market really needs a correction.”

Government bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, edged down to 3.64 percent from 3.69 percent late Monday.

Declining stocks narrowly outnumbered those that rose on New York Stock Exchange, where volume came to a light 820.5 million shares, down from 843.6 million shares at the same time Monday.

The Russell 2000 index of smaller companies fell 1.74, or 0.4 percent, to 491.07.

After tumbling on Monday, the price of crude oil rose $1.74 to settle at $69.24 a barrel on the New York Mercantile Exchange.

The dollar was mixed against other major currencies. Gold prices rose.

Overseas, Britain’s FTSE 100 fell 0.1 percent, Germany’s DAX index rose 0.3 percent, and France’s CAC-40 fell 0.2 percent. Japan’s Nikkei stock average sank 2.8 percent.