Investors Wait -- and Sell

Stocks languished yesterday, weighed down by more poor economic news and waiting for a possible Federal Reserve move today to cut interest rates.

The Dow Jones industrial average was down 0.75 percent, or 65.15 points, to 8564.53, while the Standard & Poor's 500-stock index fell 1.27 percent, or 11.16 points, to 868.57.

The tech-heavy Nasdaq composite index tumbled 2.1 percent, or 32.38 points, to 1508.34. It was dragged down by Apple, which fell 3.6 percent, to $94.75, after Goldman Sachs predicted that the company will face weak consumer demand next year and downgraded its stock.

The telecommunications and financial sectors were also hit hard yesterday. AT&T fell 3.7 percent, to $27.13, after Goldman Sachs lowered its rating and profit outlook for the firm. And J.P. Morgan Chase tumbled 7.5 percent, to $28.63 a share, the biggest loss among the Dow industrials, after Merrill Lynch lowered its rating on the firm.

Wall Street is watching a two-day Federal Reserve meeting, which analysts widely anticipate will end with another interest rate cut. Analysts have forecast that the Fed could cut a key rate by a half-point, to 0.5 percent, or even further.

"Everyone is waiting to hear from the Fed," said Peter Cardillo, chief market economist with Avalon Partners. And in the meantime, "there was no real catalyst to push the market higher."

Also weighing on stocks yesterday, industrial production fell 0.6 percent in November, according to Federal Reserve data. The decline in production, while not as steep as some economists expected, was broad-based and offered no hope for near-term improvement, analysts said. U.S. production continues to be slashed in the face of weak domestic and overseas demand, they said.

"The recessionary forces in the U.S. economy are gathering further momentum in the fourth quarter, and we are likely to see manufacturing capacity utilization collapse in the next few months to levels not seen since the early 1980s," Brian Bethune, chief U.S. financial economist for IHS Global Insight, said in a research note.

After surging as much as 8 percent, crude oil prices slid 3.8 percent, to $44.51 a barrel, on the New York Mercantile Exchange. Prices fell despite expectations that the Organization of the Petroleum Exporting Countries will announce a substantial cut in production this week that could help boost prices. Analysts have predicted that a global recession and falling demand could push the price to $35.