Market dips on rate cut doubt, earnings

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NEW YORK, Oct 30 (Reuters) U.S. stocks fell on Tuesday after disappointing earnings from Procter&Gamble and U.S. Steel and a Wall Street Journal article that cast doubt on the chances for a Federal Reserve interest rate cut on Wednesday.

Shares of Merrill Lynch fell after the investment bank announced the retirement of Chief Executive Stan O'Neal without naming his successor.

U.S. Steel posted a 35 percent slide in third-quarter profit. The company also warned of an earnings decline in the fourth quarter IDnN30219153. Procter&Gamble reported higher profit but earnings were in line with analysts' forecasts.

''U.S. Steel and P&G are supposed to be global growth, weak-dollar plays, so it's a little disappointing,'' said Peter Boockvar, equity strategist at Miller Tabak&Co in New York.

The Dow Jones industrial average was down 36.82 points, or 0.27 percent, at 13,833.44. The Standard&Poor's 500 Index was down 4.98 points, or 0.32 percent, at 1,536.00. The Nasdaq Composite Index was down 5.42 points, or 0.19 percent, at 2,812.02.

Merrill shares fell 1.4 percent to .47 on the NYSE.

P&G stock dropped 3.5 percent to .32 and U.S. Steel declined 5 percent to 6.85.

Stocks have risen recently, in part, on a widely held view the Fed would cut rates on Wednesday by at least a quarter percentage point. But Greg Ip, the newspaper's Fed watcher, wrote on Tuesday the policy makers are not considering a half-point cut and that a quarter-point cut is ''no sure thing.'' ID:nT181235.

Ailing home builder stocks dropped after the Standard&Poor's/Case Shiller index showed prices of existing single-family homes fell in August in the biggest year-over-year decline since April 1991.

The Dow Jones home builder index .D was down 1.6 percent.

The Fed's Open Market Committee is scheduled to begin a two-day policy meeting later on Tuesday, with a decision expected on Wednesday afternoon.


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