Nazz Leads Retreat

Stocks posted big losses Tuesday, led by a selloff in tech stocks, as the Fed's interest rate policy committee met for the first time this year and corporate earnings reports continued to break like waves over the market.

The Dow finished down 92.59 points, or 0.9%, to 10,609.92; the S&P 500 fell 11.33 points, or 1%, to 1144.05, its biggest one-day loss since Oct. 22; and the Nasdaq lost 37.79 points, or 1.8%, to 2116.04. Both the Dow and Nasdaq closed at 31-month highs Monday.

Volume on the New York Stock Exchange was 1.62 billion shares, while 2.09 billion shares changed hands on the Nasdaq. Decliners beat advancers by about 3 to 2 in both markets.

One major drag on the tech sector was Microsoft(MSFT Quote), which lost 33 cents, or 1.2%, to $28.47 on renewed worries about the company's shrinking deferred income.

"A lot of good news has already been factored in, so it is tough to get upside surprises," said Ken Tower, chief market strategist at CyberTrader. "Today's consumer confidence number is a good case in point," he said. Although it improved sharply from last month, it missed the high consensus expectation.

Nevertheless, Tower is still confident. "The underlying story is still very positive. We see it in last week's market internals. Although the major averages were largely flat, over 1,000 stocks made new highs, and only five made new lows."

The Fed's monetary policy committee began a two-day meeting today, with a policy announcement expected Wednesday at about 2:15 p.m. EST. The meeting is expected to yield no change in interest rate policy, though it might move the markets if the panel changes its assessment of the economy or its language about interest rate policy.

In other economic news, the Conference Board's January Consumer Confidence Index rose to 96.8 from 91.7, but economists had expected a larger jump to 99.0

Other Markets

Markets overseas finished mixed. London's FTSE 100 closed fractionally higher at 4447, while Germany's Xetra DAX gained 0.1% at 4134. In Asia, Hong Kong's Hang Seng ended up 0.3% at 13,762 and Japan's Nikkei slipped 0.4% at 10,928.