Wall Street loses ground on lack of catalysts
NEW YORK (Reuters) - U.S. stocks were slightly lower on Tuesday, putting the S&P 500 on track to continue its recent pattern of modest declines as investors seek a catalyst to justify any further gains in the wake of central banks' latest stimulus plans.
The latest moves by the European Central Bank and the U.S. Federal Reserve to stimulate their economies has put the benchmark index ahead nearly 7 percent for the quarter and 3.5 percent for September, historically a difficult month for the market to achieve gains.
As the actions by the central banks have helped contain declines, investors have found little reason to justify any additional move higher.
"Any downdraft is going to be abbreviated with the recognition of the fact the Fed has effectively put a floor in the market, and it's not just the Fed, it's the ECB as well," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
"What we are kind of dealing with here is a rudderless ship - there is no economic data to support any sort of robust buy activity."
Dow component Caterpillar Inc became the latest company to cut its profit outlook due to a sluggish global economy. Besides Caterpillar, other companies to cut their financial views include FedEx Corp , Norfolk Southern and Tesla Motors .
San Francisco Fed President John Williams said on Monday he expected the central bank to expand its bond-buying program next year to more aggressively combat the unemployment rate, but Philadelphia Fed President Charles Plosser countered on Tuesday the latest monetary stimulus will not do much to boost economic growth or lower unemployment.
Caterpillar, the heavy machinery maker, cut its 2015 profit outlook, warning that weaker commodity prices would result in a bigger-than-expected decline in demand.
Shares of Caterpillar fell 2.6 percent to $88.31 as the biggest drag on the Dow while Tesla slumped 8.5 percent to $28.06.
The Dow Jones industrial average dropped 18.39 points, or 0.14 percent, to 13,540.53. The Standard & Poor's 500 Index shed 2.36 points, or 0.16 percent, to 1,454.53. The Nasdaq Composite Index lost 6.94 points, or 0.22 percent, to 3,153.84.
In economic news, U.S. consumer confidence jumped to its highest in seven months in September, the Conference Board said.
In addition, two separate reports showed home prices rose for another month in July, though the gains were not as strong as the previous month.
Red Hat dropped 3.5 percent to $55.54 after the world's largest distributor of Linux operating software reported a lower-than-expected adjusted profit and lowered the top end of its full-year revenue outlook.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)