Stocks fell slightly yestarday after the Federal Reserve raised interest rates as expected. The news exacerbated traders' bad mood after a disappointing profit forecast from Dell Inc. According to preliminary calculations, the Dow Jones industrial average fell 33.30, or 0.32 percent, to 10,406.77.
Broader stock indicators also dropped. The Standard & Poor's 500 index fell 4.25, or 0.35 percent, to 1,202.76, while the Nasdaq composite index was dragged down by Dell, slipping 6.25, or 0.29 percent, to 2,114.05.
The Fed's quarter percentage point hike in the United States' benchmark interest rate, pushing it to 4 percent, was widely anticipated. The Fed also signaled it would continue gradually raising rates, but noted that inflation had relatively little effect on the economy in recent months.
Stocks may be falling because of sentiment on Wall Street that the hikes are unwarranted. This increase and the one or two expected to follow may simply serve to give Ben Bernanke, who has been nominated as the next Federal Reserve chairman, wiggle room to cut rates as a stimulus next year, said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati.
The most recent sign of a slowing economy came from PC maker Dell, which trimmed its sales and income targets for the current quarter after the close of regular trading Monday, saying sales in the United States and Britain were weak. The company also said it would take a third-quarter charge of $450 million (Ђ374.75 million) to restructure its consumer unit and replace some faulty PC circuits, AP reports.