NEW YORK (CNN/Money) -
Stocks clung to a tight range Tuesday as investors geared up for Wednesday's expected interest rate hike from the Federal Reserve.
Techs had shown strength during the session, but looked to feel some pressure early Wednesday after Cisco's mostly in-line earnings.
Nasdaq and S&P futures point to a mixed opening Wednesday, when fair value is taken into account.
The Dow Jones industrial average (down 4.94 to 10,386.37, Charts) and the Standard & Poor's 500 (down 0.81 to 1,164.08, Charts) index both closed just below unchanged. The Nasdaq composite (up 4.08 to 2,043.33, Charts) rose about 0.2 percent.
After the bell Tuesday, Cisco Systems (down $0.22 to $19.75, Research) reported earnings of 21 cents a share, in line with estimates and up from 17 cents a year earlier. However, revenue and gross margins was short of estimates. Shares declined 2 percent in after-hours trade.
Also after the close, news broke that Commerce Secretary Don Evans and Attorney General John Ashcroft have both resigned, in a post-election change in President Bush's cabinet.
Wednesday brings the weekly oil inventory report, and more significantly, an expected rate hike from the Fed, the nation's central bank.
The Fed is expected to boost a key short-term rate for the fourth time this year, by another quarter-percentage point, to 2 percent.
"Everyone is expecting a 25-basis point rise," said Timothy Ghriskey, chief investment officer at Solaris Asset Management. "The mantra has been measured and we expect it to continue to be measured."
Bulls saw a three-week run that culminated with last Friday's strong October payrolls report. That advance put the Dow and Nasdaq near new yearly highs and set the S&P 500 at a more than 2-1/2 year high.
But after that advance, stocks stalled Monday and Tuesday as investors prepared for Cisco and the Fed.
"We had a great run and I think it's time for a little pause as we reflect," said Tom Schrader, managing director of listed trading at Legg Mason.
After the Fed, the market's next focus this week will be the consumer sentiment report due Friday. Beyond that, investors may pick up the ball and start rallying again, Schrader said, noting that it was a seasonally good time for stock gains.
On the move
All three indexes seesawed on both sides of breakeven throughout the session, briefly staging a rally in the last hour that never really took off.
Helping sentiment, if not stock action, was another slide in oil prices, ahead of Wednesday's weekly inventory report. U.S. light crude for December delivery fell $1.72 to settle at $47.37 a barrel on the New York Mercantile Exchange, a decline of more than 3 percent.
Insurance and biotechs were among the session's active issues.
Insurer Marsh & McLennan (down $0.56 to $26.80, Research) declined after reporting weaker third-quarter results, due to one-time charges for legal and regulatory issues. The company also said it would cut about 5 percent of its work force. Marsh's CEO was forced to step down recently amid a bid-rigging scandal.
But health insurers bounced after their recent drubbing. Cigna (up $2.50 to $69.15, Research) rose after J.P. Morgan upgraded the stock to "overweight" from "neutral," saying the company's corporate turnaround seems to be on track.
Anthem (up $4.73 to $91.23, Research) and Wellpoint Health Networks (up $8.93 to $113.90, Research) both rose on talk that the California insurance commissioner was likely to OK their proposed merger.
Merck (down $0.57 to $26.00, Research) fell ore than 2 percent on news that federal prosecutors and securities regulators are investigating the circumstances surrounding the withdrawal of its arthritis treatment Vioxx in September.
Biotech Genta (down $1.30 to $1.30, Research) tumbled 50 percent in active Nasdaq trade after its larger European partner, Sanofi-Aventis, said it will no longer co-develop Genta's cancer treatment Genasense, which was dealt several regulatory and developmental setbacks this year.
Dell (down $0.25 to $37.43, Research) inched lower ahead of its earnings, due after the close Thursday. The PC maker is expected to have earned 33 cents a share, up from 26 cents a year earlier.
Market breadth was mixed. On the New York Stock Exchange, advancers beat decliners 9 to 7 on volume of 1.44 billion shares. On the Nasdaq, losers topped winners 4 to 3 on volume of 1.68 billion shares.
Treasury prices inched lower, pushing the 10-year note yield up to 4.22 percent from 4.21 percent late Monday. Bond prices and yields move in opposite directions.
The dollar inched higher versus the euro and yen, giving back bigger morning gains.
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