Wall Street's big rebound lasted just one day as stocks reverted to retreating.
Neither collapsing crude oil prices nor solid economic growth data could motivate investors who hunkered down awaiting tomorrow's Federal Reserve Board announcement on interest rates.
Odds are pretty close to 100 percent that the Fed will raise short-term rates again tomorrow--for the ninth time in the past 12 months--but stock traders are hoping the Fed will drop hints that the rate escalator is about to stop.
The odds are almost the same that the Fed will raise rates at least one more time--when it meets again in August--and few economists are predicting that hike will be the last.
Still, Wall Street can dream. The prevalent financial fantasy is that Alan Greenspan will walk out on to the front steps of the Federal Reserve headquarters overlooking The Mall and proclaim, "Okay ladies and gentlemen, we've completed the job of bringing short term rates back to normal, now you can all go back to work."
Since that is not going to happen tomorrow, it's hard to figure out what Wall Street really is waiting for.
It can't be cheaper oil prices, because since crude oil cracked the $60 a barrel mark on Monday, the oil market has rushed out like a rip tide. Today crude dropped another $1 a barrel to $57.20 on the New York Mercantile Exchange, down $3.75 a barrel over the last two days.
The decline in oil prices may take off the near-term pressure on stock prices, but it doesn't take the energy cost issue off the table. Whether oil is $60 a barrel or only $50, it's still a lot more expensive than it was last year and is burning up cash that consumers and businesses could be spending elsewhere.
Despite record oil prices, the economy is still growing at a decent clip, the final revision of first quarter economic data showed today. The economy grew at a 3.8 percent annual rate during the quarter, slightly better than the 3.5 percent growth shown in preliminary reports.
None of that was enough to persuade investors to make any big bets on the eve of the Fed meeting, so stocks fell back just a bit.
The Dow Jones industrial average fell 31 points to 10,374.48. The Nasdaq Stock Market composite index slipped a point to 2,068.89. The Standard & Poor's 500 stock index gave back a little less than 2 points, falling to 1,199.85.