NEW YORK (AFP) - US share prices froze, barely moving in nervous trade a day before the Federal Reserve was expected to raise key short-term interest rates.
A slump in the crude oil price failed to knock the market out of its funk, analysts said.
The Dow Jones Industrial Average of 30 blue-chip stocks eased 4.94 points, or 0.05 percent, to 10,386.37 at the closing bell.
The broader Standard and Poor's 500 index eased 0.81 point, or 0.07 percent, to 1,164.08.
The technology-laden Nasdaq index climbed 4.08 points, or 0.20 percent, to 2,043.33.
"We have a market that is focussing on the fact that the Fed is meeting tomorrow. There is more bad news than good news this week and yet we don't seem to want to give up any of last week's gains," said Art Hogan, analyst at Jefferies and Co.
"Effectively, the market is just trading sideways while we're waiting to see what is going to happen in Fallujah, what is going to happen in the FOMC (Federal Open Market Committee), what is going to happen as far as the economy goes going forward, and how we can justify higher corporate earnings and the falling dollar."
Economists said a quarter-point rise in the federal funds target rate -- to 2.0 percent from 1.75 percent -- was all but set for the Federal Reserve policymakers' meeting Wednesday.
Speculation of a pause in the tightening cycle at the following meeting in December has been curtailed by figures showing the US economy churned out a seven-month record of 337,000 jobs in October.
Barrington Research analyst Alexander Paris said he was encouraged that traders were not selling to lock away profits.
"There has been a huge amount of money on the sidelines because of all kinds of uncertainty, including the election, and now that it's over I think the sentiment has really changed," Paris said.
The euro was backtracking after reaching a record summit of 1.2987 dollars Monday, with the 1.30-dollar level proving more of an obstacle than expected.
On the political front, US troops and crack Iraqi soldiers surged into rubble-strewn districts in the heart of Fallujah Tuesday, seizing one-third of the city after hours of street fights with rebels.
Drugs giant Merck was a drag on the market.
Merck shares dropped 57 cents, or 2.15 percent, to 26.00 dollars, completing a 42.3-percent plunge in the past six weeks.
In a public filing with the Securities and Exchange Commission Monday, Merck said it had been told of an informal SEC inquiry into Vioxx.
The firm said it had also received a subpoena from the US Department of Justice asking for information about its research, marketing and sales of Vioxx in a criminal health care investigation.
Share market traders seemed to ignore oil prices, which plummeted as fear of a winter heating oil crunch began to evaporate.
New York's benchmark light, sweet crude contract for delivery in December slumped 1.72 dollars to close at 47.37 dollars a barrel, the lowest finish since September 21.
Brent North Sea crude for December plunged 2.21 dollars to close at 43.71 dollars.
In the past two weeks, New York light sweet crude has tumbled 14.1 percent, and Brent 15.2 percent.
11/09/2004 - 22:20 GMT - AFP