Stocks Post Modest Losses

Marc Pado, U.S. market strategist with Cantor Fitzgerald, said that the central bank had better not come up short or the market will panic.

"The rally over the last few days has been on less volume and less conviction, which we would take to imply that most of the funds completed their selling and are sitting pat, waiting for the Fed decision," he said. "[A cut of] 25 basis points is about 96% baked in the cake. Another 25 basis points is expected before the end of the year. Consolidation is the key for today."

Breadth was weak. On the New York Stock Exchange 3.11 billion shares changed hands, as decliners topped advancers by a 7-to-4 margin. Volume on the Nasdaq reached 2.12 billion shares, with losers outpacing winners nearly 3 to 2.

As for earnings, UBS (UBS Quote) said that third-quarter income fell 41% from a year ago, as the Swiss financial services firm had to deal with writedowns due to the subprime mortgage mess over the summer.

UBS also warned it may have to take further writedowns in the fourth quarter because of its ongoing exposure to the U.S. mortgage markets. Shares were off 14 cents, or 0.3%, to $53.11.

European bourses dipped following the UBS numbers. London's FTSE 100 lost 0.7%, the Paris CAC 40 was off 0.6%, and Germany's Xetra Dax was down 0.4%.