Wall Street slips before Fed, tech sector weighs

NEW YORK (Reuters) - Wall Street edged lower on Monday, led by weakness in technology shares as investors locked in gains on a recent rally ahead of possible policy action from the Federal Reserve this week.

The benchmark S&P 500 index rose 2.2 percent last week to hit highs not seen in nearly five years, and traders were eyeing the 1,440 level on the S&P as the next barrier to further gains. The Nasdaq hit a 12-year high last week.

Shares of Intel Corp lost nearly 4 percent after several brokerages cut price targets on the chipmaker. Shares of Apple Inc , the world's largest publicly traded company by market value, dropped almost 2 percent.

Investors were reluctant to push Wall Street higher before key event risks this week, including a ruling by Germany's constitutional court on Wednesday on the legality of the euro zone's permanent financial rescue fund and a policy decision from the Fed on Thursday.

"The markets are in a wait-and-see mode in the early part of this week," said Jim Awad, managing director at Zephyr Management in New York. "You have to say that the markets are up a lot, so the short-term risks are on the downside."

The Fed looks set to launch a third round of bond purchases this week and economists said Friday's weak report on jobs growth for August was likely to convince the U.S. central bank a looser monetary policy was needed.

Expectations for more stimulus measures from central banks in the United States and Europe have underpinned the markets in recent weeks, but some analysts say a lot of the good news may have already been priced into the market.

The Dow Jones industrial average <.dji> dropped 13.75 points, or 0.10 percent, to 13,292.89. The Standard & Poor's 500 Index <.spx> dropped 3.92 points, or 0.27 percent, to 1,434.00. The Nasdaq Composite Index <.ixic> dropped 23.60 points, or 0.75 percent, to 3,112.82.

Investors sold some big-cap tech names that have done well all year. Worse-than-expected data on imports from China added to selling in the sector.

"Today there is a little pull back, a little profit-taking in technology after last week," said Gary Wedbush, head of trading at regional investment bank Wedbush Morgan in Los Angeles. "I would use it as a buying opportunity."

Chinese import data showed a fall of 2.6 percent on the year in August, short of expectations for a 3.5 percent rise. Exports grew 2.7 percent, below forecasts for a 3 percent rise in a Reuters poll.

American International Group Inc shed 1.2 percent to $33.58 after the U.S. Treasury Department said it will sell most of its stake in the insurer, making the government a minority investor for the first time since it rescued the company in the depths of the financial crisis four years ago.

Plains Exploration & Production Co said it will buy BP Plc's stake in some deepwater Gulf of Mexico wells for $5.55 billion to boost its oil production. U.S.-listed shares of BP edge d up 0.5 percent to $42.12 and Plains Exploration slumped 9.5 percent to $36.50.

Titan Machinery Inc shares dropped 21 percent to $19.86 after the farm equipment retailer cut its full-year profit forecast after it reported a lower-than-expected quarterly profit as the worst drought in 56 years in the U.S. Midwest hit prices of tractors and combines.

(Editing by Dave Zimmerman)

Source: http://news.yahoo.com/stock-index-futures-signal-early-losses-085828486--finance.html

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