NEW YORK – U.S. stocks fell on Tuesday a day after Dell Inc. (DELL), the world's No. 1 personal computer maker, cut its revenue outlook and as investors anticipated the Federal Reserve's 12th straight interest-rate increase.
Shares of Dell fell 9.3 percent to $28.91 on Nasdaq after hitting a low of $28.81, its lowest in more than two years. Dell on Monday posted preliminary third-quarter earnings below expectations and lowered its revenue forecast.
The Dow Jones industrial average (DJI) was down 12.55 points, or 0.12 percent, at 10,427.52. The Standard & Poor's 500 Index (SPX) was down 3.89 points, or 0.32 percent, at 1,203.12. The technology-laced Nasdaq Composite Index (IXIC) was down 7.76 points, or 0.37 percent, at 2,112.54.
The Federal Open Market Committee, the central bank's policy-making panel, began deliberating on Tuesday and is likely to announce a quarter-percentage point increase in the fed funds rate to 4 percent later. Investors also will scrutinize the accompanying statement for clues about the outlook for further increases. An announcement is expected at 2:15 p.m.
"They'll raise a quarter-point today and in December, but it would not surprise us if there was some sort of language change that they're near the end of rate hikes," said Scott Wren, senior equity strategist at A.G. Edwards & Sons Inc. in St. Louis. "It will be a headwind for the market until we get some sort of indication about being at a neutral rate."
The disappointing Dell outlook was hurting other computer-related shares, analysts said. Intel Corp. (INTC), which supplies chips for Dell's computers, fell 2.7 percent to $22.86.
Shares of Nabi Biopharmaceuticals (NABI) plunged 69.7 percent to $3.90 on Nasdaq after it said its experimental vaccine against staphylococcus aureus bacteria failed in a late-stage trial.
In takeover news, defense contractor Lockheed Martin Corp. (LMT) and three private equity firms are considering a bid for Computer Sciences Corp. (CSC), a technical services provider, according to a report in the Wall Street Journal.
Shares of Computer Sciences shot up 13.7 percent to $58.29 on the NYSE.
The Institute for Supply Management manufacturing index dipped to 59.1 in October from 59.4 in September. Economists in a Reuters survey had expected a median reading of 57.0. The prices paid index, a measure of inflation, rose to 84 last month, from 78 a month earlier.