Stocks Finish Flat as Fed Meets

A broad selloff left traders gun shy on Tuesday.

A day after the Dow Jones Industrial Average dropped 201 points, the blue-chip index found little direction. The Dow ended the day down 16 points at 8323. The Nasdaq finished down a point at 1765, and the S&P 500 picked up 2 at 895.

Commodities prices got a small bump, lifting energy and materials stocks. Oil prices were higher in afternoon trading. By 4:07 p.m., crude traded up $1.69 on the day at $69.19 a barrel.

Traders appeared unimpressed with the May report on existing home sales, which showed an increase in the annual rates of sales in three out of four regional markets. The overall annual rate of existing home sales came in a bit below economists' expectations. The May report on new home sales is scheduled to be released by the Commerce Department tomorrow.

In economic news, Moody's Investors Service said the U.S. would maintain its triple-A credit rating, despite heavy borrowing in an effort to stimulate the economy, Reuters reported. Moody's projects the rating will remain static for at least the next 18 months.

In Washington, members of the Federal Reserve headed into their  two-day meeting on monetary policy. The Fed is widely expected to leave the federal funds rate flat at 0.00% to 0.25%, but traders will be watching for hints of language hinting at inflation that could signal a change in the foreseeable future.

Also in Washington, the Obama administration continues to enjoy a strong approval rating (65%), according to the results of the latest Washington Post-ABC News poll, but American patience with the White House and its ability to handle the economic crisis is slipping. The new survey suggests the percentage of Americans that believe the stimulus package will draw the country out of a recession has declined to 52%, down from a prior reading of 59%.

World markets were mixed. Asia took a hit in the wake of the U.S. selloff. Japan's Nikkei dropped 2.8%, while Hong Kong's Hang Seng gave up 2.9%. In Europe, the U.K.'s FTSE gave up 0.1%.