U.S. stock indexes deflated by Fed talk
Wall Street overbought; has September correction arrived?
NEW YORK (MarketWatch) — U.S. stock indexes fell Tuesday, surrendering gains after a nonvoting Federal Reserve member, Charles Plosser, offered a negative take on the central bank’s latest round of monetary easing.
“We still need effective fiscal policy,” said Phil Orlando, equity-market strategist at Federated Investors, referencing the limitations of central-bank action on the U.S. economy.

After rising 61 points, the Dow Jones Industrial Average (DJI JIA) declined 101.37 points, or 0.8%, at 13,457.55, with 25 of its 30 components losing ground, led by Caterpillar Inc. (NYSE:CAT) , off 4.3% after the equipment maker reduced its earnings outlook.

Bruce Bittles, chief investment strategist at R.W. Baird & Co., played down the decline, saying the market has had a big run and looking to “relieve the overbought condition.”

“Folks were looking for the market to correct in September, and that didn’t happen, and uncertainty about the [U.S.] election plays a role, too,” Bittles added.

Extending loses into a fourth session, the S&P 500 index (SNC:SPX) fell 15.3 points, or 1.1%, to 1,441.59, ending at a two-week low. The losses extended to all 10 of the S&P’s major sectors, with technology and financials hardest hit.

“We’ll try to close the quarter at just around present levels. I don’t see us marching much higher in the short term. We’re positioned to close the quarter with some nice gains,” said Peter Cardillo, chief market economist at Rockwell Global Capital. The S&P 500 is currently up 5.8% for the quarter, which ends at Friday’s closing bell.

Taking its hardest hit since June 25, the Nasdaq Composite (NASDAQ:COMP) declined 43.05 points, or 1.4%, to 3,117.73.
http://www.marketwatch.com/story/us-stocks-ga...2012-09-25