Rate-cut doubts sink Street as Nasdaq goes bearish

By Jennifer Coogan

Macy's Inc added to pessimism late in the session after it released dismal sales figures, raising anxiety about Thursday's wave of sales results due from a slew of other retailers.

The market ran out of steam in early afternoon after two Federal Reserve Bank presidents said policy-makers need to remain vigilant against quickening inflation pressures this year, even as the economy slows sharply.

"I think they're just trying to temper the comments that you've been seeing in the last few days that the Fed needs another intermeeting cut," said Subodh Kumar, chief investment strategist, Subodh Kumar & Associates in Toronto. "The market is responding to this uncertainty."

Nasdaq is now down 20.3 percent from its October peak, signaling that a bull market run that had begun in October 2002 is officially over.

CME shares fell to $485.25 and NYMEX ended at $87.88.

A $147.4 billion takeover offer for Anglo-Australian miner Rio Tinto by rival BHP Billiton failed to stir enthusiasm in the U.S. equity market.

Shares of Disney jumped 4.8 percent to $31.50 on earnings that topped Wall Street estimates, while Time Warner shares rose 2 percent to $15.71 after it said it expects profit growth to match or beat Wall Street expectations.

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