U.S. stocks fluctuated, after a four-day gain in the Standard & Poor’s 500 Index, ahead of a Federal Reserve decision on whether it will boost the economy.
Adobe Systems Inc. (ADBE) (ADBE), the world’s largest maker of graphic- design software, slid 5.6 percent after forecasting sales and profit that trailed some estimates. Procter & Gamble Co. (PG) (PG) fell 3.2 percent after the consumer-goods company cut its earnings projections. JPMorgan Chase & Co. (JPM) (JPM), the largest U.S. bank, gained 2.1 percent as it’s poised to more than double the value of its investment in London Metal Exchange shares bought seven months ago from the U.K. unit of bankrupt MF Global Holdings Ltd.
The S&P 500 declined less than 0.1 percent to 1,357.9 at 10:19 a.m. New York time. The Dow Jones Industrial Average added 5.45 points, or less than 0.1 percent, to 12,842.78. Trading in S&P 500 companies was down 13 percent from the 30-day average at this time of day.
“People are looking for some comfort from the Fed,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in a telephone interview today. His firm oversees more than $12 billion. “Just adding to the Operation Twist might not be enough to make them happy. They would like to see something more coming out of the Fed. We’re of the opinion that they are not going to get that.”
The Fed will probably decide today to expand Operation Twist beyond $400 billion to spur growth and buy protection against a deeper crisis in Europe, according to a Bloomberg News survey of economists. The program, which seeks to lower borrowing costs by extending the average maturity of the securities in the central bank’s portfolio, ends this month.
Policy Bets

Expectations for further policy action gave stocks their first back-to-back weekly gain since April on June 15. The S&P 500 earlier this month was on the brink of a so-called correction, or a 10 percent drop from a recent peak, on concern about a global slowdown and a worsening of Europe’s crisis.
Investors also watched the latest developments in Europe’s attempts to tame its debt crisis. Greek political leaders struck an agreement on a governing coalition that will seek relief from austerity measures tied to emergency loans, with New Democracy head Antonis Samaras set to be the prime minister.
Seven out of 10 groups in the S&P 500 advanced as consumer staples and utility companies had the biggest losses. Measures of energy and financial shares increased.
Adobe retreated 5.6 percent to $31.05. The company reduced the high end of its annual sales growth forecast range to 7 percent from 8 percent, which is “anemic” for a technology company, said Barbara Coffey, an analyst with National Securities in New York.
P&G Slumps

P&G lost 3.2 percent to $60.24. The reduced forecasts illustrate the difficulties faced by consumer-products makers as rising unemployment in Europe and North America restricts spending.
Walgreen Co. (WAG) (WAG) retreated 3.6 percent to $29. The biggest U.S. drugstore chain was downgraded to neutral from outperform at Macquarie Group Ltd. by equity analyst Dane Leone. The 12-month share-price estimate is $34.
JPMorgan gained 2.1 percent to $36.11. The bank is the biggest investor in the LME, with 1.4 million shares valued at 150.6 million pounds ($236.8 million) after Hong Kong Exchanges & Clearing Ltd. agreed to buy the London bourse at 107.60 pounds a share. JPMorgan increased its stake in November when it agreed to buy 600,000 shares from MF Global U.K. Ltd. at 41.92 pounds apiece.
The largest drop in the Chicago Board Options Exchange Volatility Index since August brought the gauge to its cheapest level of the year, a sign of increasing confidence among traders that the Federal Reserve will take action again to spur economic growth.
Historical Volatility

The VIX slid 25 percent in the three days ended June 18 for the biggest slump in 10 months. The difference between its price and the 20-day historical volatility of the S&P 500 sank to 3.1 percent yesterday, showing investors are paying the least since December for protection, according to data compiled by Bloomberg.
Fed policy makers, meeting for a second day today, are weighing whether to introduce more stimulus amid the slowest U.S. economic growth following a recession since World War II. Investors’ demand for equity protection is falling amid optimism central bankers will announce additional easing and after Greek voters backed lawmakers that favor bailouts, according to Kevin Caron of Stifel Nicolaus & Co. and Acorn Derivatives Management Corp.’s Andrew Greeley.
“There’s a growing sense that there will be some kind of policy response to the weakening global economy,” Caron, the Florham Park, New Jersey-based market strategist for the private client group at Stifel Nicolaus, which has more than $120 billion in assets, said yesterday in a phone interview. “That, combined with having moved beyond the Sunday vote in Greece, provide a little breathing room for markets.”
To contact the reporter on this story: Rita Nazareth in New York at [email protected]
To contact the editor responsible for this story: Nick Baker at [email protected]