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US STOCKS-Wall St edges down after recent rally; FedEx a drag

Source : REUTERS
Last Updated: Thu, Sep 20, 2012 14:03 hrs

* Investor focus turns to economic data after central bank rally

* Homebuilder sentiment rises to six-year high

* FedEx dips after lowering profit outlook

* AMD shares drop as CFO to leave

* Indexes: Dow down 0.03 pct, S&P off 0.2 pct, Nasdaq off 0.1 pct

By Caroline Valetkevitch

NEW YORK, Sept 18 (Reuters) - U.S. stocks slipped on T uesday, pulling back after last week's central bank stimulus rally as bellwether FedEx cut its profit forecast.

U.S. stocks have rallied nearly 6 percent since the start of August, propelling the S&P 500 index to levels not seen in nearly five years as central banks in Europe and the United States acted to buttress flagging economies. But analysts say that for the rally to continue, economic data must improve.

"We've gotten to the point where price momentum was such the market averages were overextended at the end of last week," said

Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon. "Now we have this quiet period."

FedEx Corp cut its profit forecast for its fiscal year 2013, saying that a weakening world economy had prompted customers to shift toward lower-priced shipping. Its shares fell 2.5 percent to $87.08 and the Dow Jones transportation average lost 1.2 percent.

The Dow Jones industrial average was down 0.80 point, or 0.01 percent, at 13,552.30. The Standard & Poor's 500 Index was down 3.05 points, or 0.21 percent, at 1,458.14. The Nasdaq Composite Index was down 3.08 points, or 0.10 percent, at 3,175.60.

Estimates for third-quarter profits have fallen sharply in recent months, and S&P 500 earnings for the quarter are expected to show a year-over-year decline, Thomson Reuters data showed.

Apple Inc, which broke sales records with its new smartphone, set another all-time high at $701.44 a share before slipping 0.1 percent to $699.07.

Helping to weigh on the tech sector, Advanced Micro Devices Inc shares tumbled 8.2 percent to $3.68 after company said its chief financial officer was leaving the struggling personal computer chipmaker. The stock was the biggest percentage decliner on the PHLX semiconductor index, which lost 0.4 percent.

Helping to limit the day's decline, U.S. homebuilder sentiment rose for the fifth month in a row in September to its highest level in over six years, the National Association of Home Builders said. It was a fresh sign of momentum for the struggling housing market.

The PHLX housing sector index, however, was down 0.9 percent.

Aside from more economic reports on housing this week, investors will get readings on manufacturing. The Philadelphia Federal Reserve's survey of activity in the mid-Atlantic region, as well as the Markit manufacturing purchasing manager's index for September, are due on T hur sday.

Data on Monday showed factory activity in New York state fell to its lowest level in nearly 3-1/2 years.



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