* U.S. Midwest business barometer contracts in April
* Fed's FOMC begins 2-day monetary policy meeting
* U.S. Feb home prices see best yearly rise in almost 7
* Indexes down: Dow 0.5 pct; S&P 0.4 pct; Nasdaq 0.1 pct
By Angela Moon
NEW YORK, April 30 (Reuters) - U.S. stocks fell on Tuesday
after a weaker-than-expected index of Midwest business activity,
and investors booked profits from a rally that took the
benchmark S&P 500 index to a record.
The market started off flat but dipped just before the
public release of the Institute for Supply Management-Chicago
business activity index at 9:45 a.m. (1345 GMT). But the index
is released to subscribers via conference call 3 minutes
"The data has gotten people a bit nervous but this wasn't
crucial data for the market anyway," said Uri Landesman,
president with hedge fund Platinum Partners in New York.
"At this point, at these levels, the market is only in for
perfection. Anything else that shows otherwise, the market will
Data showed business activity unexpectedly contracted in the
Midwest in April to its lowest level since September 2009 as a
gauge of employment pulled back.
Other economic data was mixed, leaving investors cautious
before central banks' meetings this week that could provide a
better picture of the outlook for the global economy. Their
decisions could be a catalyst to take the S&P 500 index above
The Dow Jones industrial average was down 67.61
points, or 0.46 percent, at 14,751.14. The Standard & Poor's 500
Index was down 5.55 points, or 0.35 percent, at
1,588.06. The Nasdaq Composite Index was down 3.49
points, or 0.11 percent, at 3,303.53. The S&P 500 ended at a
record 1,593.61 on Monday.
The Fed's Open Market Committee will begin a two-day meeting
on monetary policy, with a statement expected on Wednesday.
Recent weak U.S. economic data and signs of low inflation point
to the Fed's maintaining its pace of bond buying to stimulate
The European Central Bank will convene on Thursday, and a
Reuters poll of economists on Thursday said policymakers are
expected to cut interest rates.
The S&P 500 index ended at an all-time high on Monday as
growth-oriented stocks, including energy and technology, led the
way to the index's sixth rise in the past seven sessions.
A positive finish to April would deliver a sixth straight
month of gains. That would be the longest winning streak since
September 2009 when the index rallied for seven straight months.
The broad market index is up 1.6 percent for the month.
"Short interest is rising, but the market continues to move
higher. If the S&P were to break over 1,600 we could see a
monster short squeeze," said Jim Brown, editor of options
analytics firm optioninvestor.com in a note late on Monday.
Other data on Tuesday showed U.S. single-family home prices
increased in February to the best annual rise since May 2006 in
a sign the housing recovery remains on track.
The Conference Board's consumer confidence index rebounded
in April as Americans felt better about the outlook for the
economy and their income prospects.
In earnings, financial stocks were likely to be in focus
after UBS beat expectations for first-quarter profit
thanks to a surge in trading income from its investment bank and
more fees from wealthy clients. [ID:nL6N0DH07H} Strong results
from banks and expectations of more central bank stimulus took
European shares to a 4-1/2 year high.
Pfizer Inc shares were down 2.3 percent at $29.73
after posting lower-than-expected quarterly earnings and
revenue. The largest U.S. drugmaker also trimmed its full-year
U.S. retailer Best Buy Co Inc retreated from its
ill-fated European expansion by selling its stake in a joint
venture to Carphone Warehouse Group for less than half
what it paid five years ago. Best Buy shares jumped nearly 10
percent to $26.49.
Avon Products Inc reported a better-than-expected
first-quarter profit in the latest sign the beauty products
company's business continues to improve. The stock was up 4.9
percent at $23.33.