U.S. Stocks Fall as Economists Predict Fed Stimulus Cut

Bloomberg, (14/8) -- U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for the sixth time in eight days, after economists predicted the Federal Reserve will reduce stimulus in September as European data added to signs that the global economy is strengthening. he S&P 500 lost 0.5 percent to 1,685.39 at 4 p.m. in New York, the lowest level since July 29. The benchmark gauge has dropped 1.4 percent since a record high on Aug. 2. The Dow Jones Industrial Average declined 113.35 points, or 0.7 percent, to 15,337.66, the lowest since July 10. The Fed, led by Chairman Ben S. Bernanke, will probably reduce its $85 billion in monthly bond purchases at its meeting on Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg from Aug. 9 to Aug. 13. In a survey last month, half of economists predicted a reduction at next month’s meeting. A report today showed wholesale prices in the U.S. were little changed in July, reflecting the biggest drop in auto costs in four years. Fed policy makers continue to see inflation running below the central bank’s 2 percent goal even as the expansion picks up in the second half of the year. Separate data showed the euro area’s economy emerged from a record-long recession in the second quarter, led by Germany and France. Gross domestic product expanded 0.3 percent after a 0.3 percent contraction in the first quarter, the European Union’s statistics office said.