Week ends with modest losses

NEW YORK – Wall Street finished the week with a listless session Friday as a decline in big-ticket factory goods did little to assuage investors’ economic worries and left the major indexes slightly lower. The market posted a modest loss for the week.

Durable goods orders dropped 0.3 percent in May after a sharp 4.7 percent drop the month before, according to the Commerce Department, the first back-to-back declines in two years. Economists expected orders to rise 0.4 percent. Corporate spending remained strong, however, giving investors hope that the economic slowdown may not be severe.

Yet with the Federal Reserve’s Open Market Committee meeting Wednesday and Thursday – and widely expected to hike interest rates yet again – Wall Street’s chronic anxiety about economic growth overshadowed trading, and likely will continue to do so until the Fed’s decision is announced Thursday afternoon.

“The business spending within the durable goods report was encouraging once you got past the headline numbers,” said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. “But even with that, there’s a lot of investors, if they’ve got an idea for a trade, they’re not going to do it until you get past the Fed meeting.”

The Dow Jones industrial average fell 30.02, or 0.27 percent, to 10,989.09.

Broader stock indicators were just below the flatline. The Standard & Poor’s 500 index lost 1.10, or 0.09 percent, to 1,244.50, while the Nasdaq composite index dropped 1.51, or 0.07 percent, to 2,121.47.

With energy prices potentially stirring inflation, the Fed has become increasingly hawkish on raising rates, which has led some on Wall Street to consider whether policymakers may go with a half percentage point increase in the nation’s benchmark rate. Most observers, however, predict another quarter percentage point hike, along with a statement saying the Fed may still raise rates down the road.

“If it’s just the quarter point, and the Fed still says it could raise, then we could be in for a tough summer,” said Jay Suskind, head trader for Ryan Beck & Co. “The only thing that could save the summer is corporate earnings, whether they come in strong enough so that the economy can weather the rate hikes, or weak enough for the Fed to stop raising.”