Stocks Open Lower Ahead of Economic Data

NEW YORK - Stocks fell in early trading Wednesday as investors awaited a report on the health of the nation's service economy.

Any weakness in the service sector, whose industries range from banking to retail and travel and account for 80 percent of U.S. economic activity, could support the case for further interest rate cuts from the Federal Reserve. The Institute for Supply Management issues its reading on the sector at 10 a.m. EDT and is expected to report slower growth in September, following Monday's a weaker-than-expected reading on the manufacturing sector.

The Fed cut its key lending rate last month by a half percentage point. Many investors expect the central bank to trim rates further this year, but there is debate over whether the reductions will come at the Fed meeting Oct. 30-31 or in December.

Despite lower interest rates, home buying continued at its sluggish pace. The Mortgage Bankers Association said mortgage application volume fell 2.7 percent in the week ended Sept. 28. The MBA composite index, which gauges the level of mortgage applications, fell to 636.7 from 654.2 a week earlier.

In early trading, the Dow Jones industrial average fell 51.62, or 0.37 percent, to 13,995.69. The Dow moved back above the 14,000 mark on Monday after spending 2 1/2 months below that level amid concerns about soured mortgages, tighter access to credit and the ongoing housing market slump.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 6.09, or 0.39 percent, to 1,540.54, and the Nasdaq composite index fell 9.80, or 0.36 percent, to 2,737.31.

Bond prices rose Wednesday, as yields slipped. The 10-year Treasury note fell to 4.50 percent from 4.53 percent late Tuesday.

In corporate news, Germany's Deutsche Bank AG on Wednesday said it would book charges totaling about $3.1 billion in the third quarter due to losses on loans, leveraged loans and structured credit products amid turmoil in the mortgage lending market. But the bank expects gains on asset sales and tax credits to offset those losses. Deutsche projects a profit of $1.98 billion, higher than a year ago.

The bank's forecast follows warnings on results from Citigroup Inc. and Switzerland's UBS AG on Monday. However, shares of banks have been resilient this week, as investors appear relieved to get bad news of the turbulent third quarter out of the way amid indications earnings may return to normal levels this quarter.

In commodities trading, gold prices rose in early trading on the New York Mercantile Exchange following a sharp fall on Tuesday. Oil prices held over $80 a barrel in premarket electronic trading on the New York Mercantile Exchange.

The dollar was mixed against other major currencies.

The Russell 2000 index of smaller companies fell 2.78, or 0.33 percent, to 829.19.

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