US STOCKS-Wall St edges lower as housing, outlooks weigh

* Caterpillar shares drop 6 pct after Q4 results

* New home sales data hurts home builders

* Market braces for Fed statement, Obama speech

* Dow falls 0.3 pct, S&P down 0.2 pct, Nasdaq flat

* For up-to-the-minute market news, click [STXNEWS/US]
(Updates to midday, changes byline)

By Edward Krudy

NEW YORK, Jan 27 (BestGrowthStock) – The S&P 500 and the Dow fell
on Wednesday after a report showed new home sales dropped
unexpectedly in December, while Caterpillar Inc (CAT.N: ) and
United Technologies Corp (UTX.N: ) gave guarded outlooks for the
months ahead.

Investors were also wary before U.S. President Barack
Obama’s State of the Union speech and the Federal Reserve’s
policy statement later on Wednesday. The Fed statement may
provide clues on how long it will keep in place ultra-low
interest rates and its easy-money program.

“There is risk aversion about extending capital into the
market place,” said Craig Peckham, equity trading strategist at
Jefferies & Company in New York. “There is concern about how
the language in the (Fed’s) statement changes relative to what
we saw in December.”

The Dow Jones industrial average (.DJI: ) fell 33.40 points,
or 0.33 percent, at 10,160.89. The Standard & Poor’s 500 Index
(.SPX: ) lost 2.42 points, or 0.22 percent, at 1,089.75. The
Nasdaq Composite Index (.IXIC: ) inched up 0.10 points, or 0.00
percent, at 2,203.83.

New home sales fell for the second straight month,
according to the Commerce Department. That weighed on home
building stocks such as Pulte Homes Inc (PHM.N: ), which fell 2.4
percent to $10.10. The Dow Jones home construction index
(.DJUSHB: ) fell 0.7 percent. [ID:nN26112107]

Caterpillar Inc (CAT.N: ) and United Technologies Corp
(UTX.N: ) were the top two drags on the Dow, with Caterpillar
shedding 6.3 percent to $52.29, and United Tech off 2 percent
to $67.12.

Caterpillar posted stronger-than-expected earnings but
forecast 2010 profit below expectations, while United Tech
posted a 6 percent drop in quarterly profit and its finance
chief warned of a “tough” first quarter. [ID:nN27163192]

Obama, in his first State of the Union address, is expected
to promise the creation of more jobs and a slimmed budget
deficit. The S&P 500 has fallen more than 5 percent over the
last week, partly due to political uncertainty surrounding
banking regulation. [ID:nN26106537] and [ID:nOBAMA]

On the Nasdaq Gilead Sciences Inc (GILD.O: ) and Yahoo Inc
(YHOO.O: ) reported stronger-than-expected results late Tuesday.
For details, see [ID:nN26120092] and [ID:nN2519773]. Gilead
gained 6.8 percent to $47.90, while Yahoo climbed 1.5 percent
to $16.23.

Boeing Co (BA.N: ) was the Dow’s top boost, rising 4.1
percent to $59.30 after reporting that it swung to a quarterly
profit as revenues soared 42 percent. [ID:nN26103777]

Stock Market Today

(Editing by Kenneth Barry)

US STOCKS-Wall St edges lower as housing, outlooks weigh