U.S. stocks fell, a day after the Standard & Poor’s 500 Index reached a four-month high, as commodity producers slid on lower metal and oil prices and investors awaited more clues from the Federal Reserve about the outlook for the economy. Freeport-McMoRan Copper & Gold Inc. and Chevron Corp. paced declines in producers of raw materials and energy. Monsanto Co. slumped 2.5 percent after the world’s biggest seed company was cut to “hold” at Morgan Joseph & Co. ConAgra Foods Inc., the maker of Healthy Choice dinners, dropped 4.7 percent after reporting profit that missed analysts’ estimates. The S&P 500 slipped 0.2 percent to 1,139.97 at 11:57 a.m. in New York after gaining the previous two sessions. The Dow Jones Industrial Average declined 7.65 points, or 0.1 percent, to 10,745.97. “We’re going to be in this slow-growth environment,” said Jason Pride, director of investment strategy at Glenmede in Philadelphia, which manages $18 billion. “Markets, countries’ economies are being repaired. Today is more of a wait-and-see attitude ahead of the Fed announcement. They’ll probably signal that we should have more downside for the economy in order to have further quantitative easing,” he said, referring to the central bank’s program to purchase debt to bolster the economy. The S&P 500 advanced 1.5 percent to 1,142.71 yesterday, the benchmark measure’s highest level since May 13, as Lennar Corp. beat analysts’ earnings estimates and International Business Machines Corp. announced a $1.7 billion takeover. The gauge has gained 2.1 percent so far this year, leaving it 6.4 percent below its peak for 2010 on April 23. Quantitative Easing The Fed is likely to affirm its pledge to keep interest rates low for an “extended period,” according to economists surveyed by Bloomberg News. Many investors will be looking for signs the central bank is planning to undertake another round of asset purchases to safeguard the economic recovery, a process known as quantitative easing. The announcement is scheduled for 2:15 p.m. in Washington. “The chances of anything on quantitative easing in the FOMC statement look extremely remote,” Robert Carnell, chief international economist at ING Financial Markets, said in a note. “There has also been some talk of a hint at revisions to the Fed’s internal forecasts, though these are due for release in the minutes following the November FOMC meeting.” Fed Watch The S&P 500 has risen on 75 percent of the days since March 2009 when the Fed announced its interest-rate decisions, according to Rob Leiphart of Birinyi Associates Inc. The benchmark index of U.S. stocks climbed on 9 of the 12 days since March 18, 2009, that the Fed reported its decision, rising an average of 0.5 percent, according to a report dated yesterday by Westport, Connecticut-based Birinyi. The Fed kept its rate unchanged each time. Raw-materials companies in the S&P 500 fell 1.1 percent collectively for the biggest drop among 10 groups. Monsanto slumped 2.5 percent to $54.14. The world’s biggest seed company was downgraded to “hold” from “buy” at Morgan Joseph. ConAgra dropped 4.7 percent to $21.31. The maker of Banquet and Healthy Choice dinners posted a 12 percent decline in first- quarter earnings, hurt by slowing sales in its consumer-foods business. The company also lowered its annual earnings forecast. SanDisk Corp. fell 5 percent to $35.89. The world’s biggest maker of flash-memory cards was downgraded to “neutral” from “buy” at Sterne, Agee & Leach Inc. REITs, Homebuilders Equity Residential led a gauge of real-estate companies down 1.6 percent, the biggest decline among 24 groups in the S&P 500. The largest publicly traded U.S. apartment landlord was downgraded to “hold” from “buy” at Stifel Nicolaus & Co. Equity Residential dropped 2.7 percent to $49.13. Homebuilders rallied after a Commerce Department report showed that builders broke ground on 598,000 homes at an annual rate, up 10.5 percent and the most since April, following a 541,000 pace in July. Economists forecast August starts at a 550,000 pace, according to the median estimate in a Bloomberg News survey. Building permits, a proxy of future activity, rose from a record low. Standard Pacific Corp. gained 1.3 percent to $4.01, while KB Home rose 1 percent to $12.08. “It’s encouraging to see housing data stabilize amid a significant inventory overhang,” said Michael Mullaney, who helps manage $9 billion at Fiduciary Trust Co. in Boston. A measure of airline stocks rallied as much as 2.1 percent after a trade group said carriers may post an $8.9 billion global profit in 2010, more than triple an earlier forecast. Earnings at airlines will probably fall to $5.3 billion next year because of concerns about the sustainability of growth and “razor thin” profit margins, International Air Transport Association said in a statement today. Continental Airlines Inc. gained 4.1 percent to $24.47. UAL Corp. rose 3.8 percent to $23.28. To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net. To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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