Wall Street drops as anxiety high ahead of Fed meet

NEW YORK, Sept 17, 2007 (AFP) – Wall Street stocks fell Monday as anxiety ran high a day ahead of a crucial Federal Reserve meeting to decide the course of US interest rates. Shares in the Nasdaq Stock Market fell 1.43 percent to 34.41 on reports it was close to a deal to sell its nearly 30 percent stake in the London Stock Exchange to Qatar’s investment arm.

The Dow Jones Industrial Average dropped 39.10 points (0.29 percent) to close at at 13,403.42 and the tech-heavy Nasdaq shed 20.52 points (0.79 percent) to 2,581.66.
The broad-market Standard & Poor’s 500 index declined 7.60 points (0.51 percent) to 1,476.65.

The market action came after gains of better than two percent for the broad market last week, with many investors banking on a rate cut at Tuesday’s Federal Open Market Committee (FOMC) meeting to ease stress in the housing and credit markets.

Analysts are sharply divided on the Fed’s course. Many say the Fed needs to cut its base rate of 5.25 percent by 25 or 50 basis points, but others say a reduction would fuel inflation and bring back easy money conditions that have led to the real estate boom-and-bust cycle.

“Expectations for a Fed bailout ar