Stocks Decline, `Tired' by Rally; Fed Meets Today
STOCKS SUFFERED their second 100-point decline in three trading days as the long rally lost some momentum and investors took more profits before the quarter ends.</br></br>With the year not even half over, many money managers were showing bigger gains than they had expected for the full year. Since the outlook for the economy and corporate earnings remains uncertain, some sold stocks to lock in profits.</br></br>"We had 16 weeks of rally," said Brian Pears, head stock trader at Victory Capital Management, the money-management arm of KeyCorp in Cleveland. "The market is a little tired here and it feels as if a period of consolidation is going to be necessary before the market takes the next step."</br></br>The Dow Jones Industrial Average, which was above 9300 a week ago, fell 127.80 points, or 1.39%, to 9072.95, its sharpest one-day decline in more than a month. That followed a 114-point decrease Thursday. Although the blue-chip average remains above 9000, the two declines left some investors worried the rally has lost its momentum.</br></br>Treasury bonds, which had been in a slump last week, rebounded sharply as some investors moved money toward bonds ahead of the Federal Reserve monetary-policy meeting today and tomorrow. Analysts expect the Fed to stimulate the economy by cutting its target short-term interest rate by a quarter- or half-point, to its lowest level in 45 years.