Anxiety surrounding the upcoming Federal Reserve decision on interest rates sent stocks lower, overshadowing an increase in U.S. oil inventories and a solid advance in the gross domestic product.
The Dow Jones Industrial Average fell 31.15, or 0.3 percent, to 10,374.48. The Standard & Poor's 500 Index was down 1.72, or 0.1 percent, at 1,199.85. The Nasdaq Composite Index fell 1, or 0.1 percent, to 2,068.89.
In its weekly petroleum supply report, the U.S. Energy Department said inventories of crude oil increased by 1.1 million barrels to 328.5 million barrels, or 8 percent above year-ago levels. Light sweet crude for August delivery declined by 94 cents to settle at $57.26 a barrel on the New York Mercantile Exchange.
And a Commerce Department report said the economy grew at an annual rate of 3.8 percent in the first quarter of 2005. The s new reading on gross domestic product was an improvement from the 3.5 percent estimated for the quarter a month ago and matched growth in the final quarter of 2004.
But it was the upcoming meeting of the Fed's Open Market Committee ultimately weighed on the market. The Fed's decision, and its accompanying statement assessing the economy, is expected Thursday afternoon.
Among local companies, shares of IRIS International Inc. rose 5.7 percent to $18.09 after the Chatsworth-based urinalysis technology developer announced that its Advanced Digital Imaging Research subsidiary was awarded second year funding from the National Institute of Standards and Technology for its "3-D Face Recognition for Airport Security Screening" program. In May 2004, ADIR received a grant of nearly $2 million to develop the program. The three-year grant requires annual approval of each year's funding. The recent amendment releases $580,465 to support the second year of the three-year project.
And Sport Chalet Inc. gained 4.9 percent to $17.20 after the La Canada-based sporting goods retailer proposed late Tuesday a recapitalization plan that would shift most of founder Norbert Olberz's 65 percent stake to the company's top two officers , for free. Based on Tuesday's closing price, the value of the shares given to Chairman and Chief Executive Craig Levra and Chief Financial Officer Howard Kaminsky would be more than $60 million.
The company also reported net income of $721,726 (10 cents per diluted share) for the quarter ended March 31, compared with $330,142 (5 cents) for the like period a year earlier. Sales rose to $79.2 million from $69.4 million. Analysts had expected earnings of 5 cents per diluted share on revenue of $70.5 million.
On the down side, shares of Innovo Group Inc. sank 32.8 percent to $2.17 after the Commerce-based apparel developer forecast that its 2005 results will fall well below Wall Street expectations, citing an anticipated drop in private-label sales and a slow build for its new indie jeans. Its full-year net sales from continuing operations will be about $115 million, with earnings at 5 cents per share far below the analyst average target of 31 cents per share on $145.5 million in sales.
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