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* Energy shares drop as oil prices slide
* Saudi to recover oil supplies sooner than expected -
sources
* Home Depot drops after Guggenheim downgrade
* Indexes: Dow -0.06%, S&P 500 +0.01%, Nasdaq +0.09%
(Updates to afternoon)
By Noel Randewich
Sept 17 (Reuters) - Wall Street was mixed on Tuesday as
investors awaited a widely expected Fed interest rate cut on
Wednesday, while the impact of weekend attacks on Saudi Arabia's
biggest oil refinery faded.
Equity markets took a hit on Monday after the attacks wiped
out nearly half of Saudi Arabia's oil production, sending oil
prices soaring and fuelling geopolitical tensions.
But investors were calmed after U.S. President Donald Trump
said he did not want war and Reuters reported that Saudi Arabia
was close to restoring 70% of its lost production. "People were thinking it would be months until we got that
production back on line, and now it seems more like weeks.
Putting that production back on line alleviates the risk of a
higher disruption," said Keith Buchanan, a portfolio manager at
GLOBALT Investments in Atlanta.
The S&P energy index .SPNY dipped 1.6% after recording its
strongest one-day surge since January on Monday. The so-called
defensive consumer staples .SPLRCS , utilities .SPLRCU and
real estate .SPLRCR posted some of the biggest gains among the
11 major S&P sectors.
Overall, six sectors rose and five fell.
The U.S. Federal Reserve concludes its two-day policy
meeting on Wednesday, where the central bank is expected to
lower interest rates by a quarter percentage point, the second
rate reduction of the year. Investors will also wait for clues on how far the U.S.
monetary policy easing would go, given that Fed policymakers are
deeply divided on whether more rate cuts are warranted.
"Its going to be difficult for them to signal an extremely
dovish tone, given they are already half divided at this point,"
said Chris Zaccarelli, chief investment officer at Independent
Advisor Alliance, in Charlotte, North Carolina.
The S&P 500 bank index .SPXBK , which tends to underperform
in a lower interest rate environment, fell 0.2%.
Economic reports were upbeat, as U.S. manufacturing output
increased more than expected in August, while homebuilders'
optimism grew unexpectedly brighter in September. At 2:30 pm ET, the Dow Jones Industrial Average .DJI was
down 0.06% at 27,060.17 points, while the S&P 500 .SPX gained
0.01% to 2,998.34.
The Nasdaq Composite .IXIC added 0.09% to 8,160.91.
Among stocks, Chipotle Mexican Grill Inc CMG.N jumped 3.2%
as it added a new steak dish to its menu in the United States
for the first time in three years. Home Depot Inc HD.N dropped 0.7% after Guggenheim
downgraded the home improvement chain's shares to "neutral" from
"buy".
Corning Inc GLW.N tumbled 7.6% after the Gorilla glass
maker cut its current-quarter display volume forecast.
Kraft Heinz Co KHC.O tumbled 4.3% after the packaged food
maker's second-largest investor, 3G Capital, sold over 25
million shares in open market at a discount.
Advancing issues outnumbered declining ones on the NYSE by a
1.03-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored decliners.
The S&P 500 posted 15 new 52-week highs and 1 new lows; the
Nasdaq Composite recorded 49 new highs and 22 new lows.