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US stocks close in the red ahead of Federal Reserve policy meeting

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US stocks have closed in the red as Wall Street hopes for US Federal Reserve and European Central Bank stimulus action this week and awaits a report on the July jobs market.

After two big euro-driven rallies late last week, the major indices struggled to maintain modest gains in markets lacking a catalyst.

The Dow Jones Industrial Average finished the session at 13,073.01, drifting down 2.65 points (0.02 per cent).

The S&P 500 slipped 0.67 point (0.05 per cent) to 1,385.30 and the Nasdaq shed 12.25 (0.41 per cent) to 2,945.84.

“The market focus is on squarely on the Fed’s policy meeting on Wednesday and a European Central Bank meeting on Thursday,” said Dick Green at Briefing.com.

“Equity market participants are hoping for central bank action that will decrease economic risk, increase liquidity, and in theory therefore boost stock prices.”

The Fed’s Federal Open Market Committee opens a two-day meeting Tuesday. The government reported Friday the economy slowed in the second quarter, to growth of 1.5 per cent from two per cent in the first quarter.

Investors also were looking ahead to the government’s July jobs report on Friday, expected to show unemployment remained stuck at 8.2 per cent from June and weak job growth.

There were no major US economic releases on the calendar.

Financials were under pressure. JPMorgan Chase led the Dow lower, tumbling 2.3 per cent, and Bank of America and Citigroup each fell 0.6 per cent

Fellow Dow member Hewlett-Packard shed 1.8 per cent.

Coca-Cola was the biggest blue-chip gainer, up 1.4 per cent.

Engineering merger news was in focus. Energy infrastructure-focused Chicago Bridge & Iron has agreed to acquire The Shaw Group, a global services provider, in a $US3 billion ($A2.87 billion) deal. CBI shares plunged 14.2 per cent and Shaw soared 55.5 per cent.

Dow member AT&T edged up 0.8 per cent after announcing late Friday it would repurchase up to 300 shares, representing about five per cent of its outstanding shares outstanding.

Apple added 1.7 per cent. Jury selection began in a blockbuster patent trial pitting the California technology titan against South Korea’s Samsung.

Boeing dropped 0.9 per cent after reporting an “engine issue” hit a test flight of the 787 Dreamliner in South Carolina on Saturday.

US stocks closed out last week with two days of rallies that left the Dow above 13,000 Friday for the first time since May.

Bond prices leaped. The 10-year Treasury yield dropped to 1.50 per cent from 1.56 per cent Friday, while the 30-year fell to 2.58 per cent from 2.64 per cent. Bond yields move inversely to prices.