Stocks retreat as investors take profits in advance of Federal Reserve Wed. meet

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NEW YORK — Wall Street retreated Tuesday as investors, mindful of the Federal Reserve’s upcoming meeting on interest rates, decided to cash in some profits from the market’s extended rally.

The consolidation, which follows a similar move in overseas markets, comes a day ahead of the Fed meeting. Though central bankers are expected to leave rates unchanged, Wall Street could get further direction about whether a hoped-for rate cut is in the offing.

Fresh data released on Tuesday showed the economy continues to sputter. The Commerce Department reported wholesalers’ inventories grew at a slower rate in March, failing to meet projections. Meanwhile, the National Association of Realtors lowered its forecast for the housing market this year because of stricter lending standards and subprime woes.

Data is expected to wield more influence on the direction of stocks as the pace of earnings announcements slows. But investors will be watching after the bell for reports from Walt Disney Co., one of the 30 companies that make up the Dow, and Cisco Systems Inc.

“There’s this wait-and-see pullback with regard to what the Fed might do on Wednesday,” said Janna Sampson, a portfolio manager for Oakbrook Investments. “Given the run we’ve had, and a pretty strong start of the year, this might be a case of investors positioning their portfolios a little sooner than usual before the summer doldrums.”

Stocks regained some ground from session lows in early afternoon trading, spurred by oil stocks as the price of crude rose above $62 per barrel. The Dow Jones industrial average fell 26.17, or 0.20 percent, to 13,286.80. The blue chip average had been up 24 of the last 27 sessions, and surpassed the 13,300 mark for the first time on Monday.