NEW YORK, July 31 (Reuters) - U.S. stocks fell on Monday as investors worried about the lack of a cease-fire agreement in the Middle East and prospects of slower corporate profits as economic growth slackens.
Federal Reserve Bank of St. Louis President William Poole said he is evenly split about the need for an 18th consecutive rate increase to fight inflation when Fed policy makers meet on Aug. 8.
Shares of companies whose fortunes are heavily tied to economic cycles, including diversified manufacturer General Electric Co. and plane maker Boeing Co. , paced the early decline.
Higher crude oil prices, meanwhile, boosted energy shares such as Exxon Mobil Corp. .
"We are seeing some consolidation after an great week in stocks. The lack of resolution in the Middle East does not help, bringing more uncertainty and some economic implications," said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut.
He added that higher oil prices would "hurt consumers and corporations and we're seeing many sectors under pressure, including home builders and techs."
The Dow Jones industrial average <.DJI> was down 24.18 points, or 0.22 percent, at 11,195.52. The Standard & Poor's 500 Index <.SPX> was down 3.02 points, or 0.24 percent, at 1,275.53. The Nasdaq Composite Index <.IXIC> was down 5.88 points, or 0.28 percent, at 2,088.26.
In economic news, the National Association of Purchasing Management-Chicago's index, or the Chicago PMI, rose to 57.9 from June's 56.5. A Reuters poll of economists had forecast a July reading at 56. A reading above 50 indicates expansion. [ID:nN31248321]
Boeing shares dropped 1.1 percent to $78 on the New York Stock Exchange, while GE shares fell 0.8 percent to $32.75.
But on Nasdaq Apple Computer Inc. shares rose 1.8 percent to $66.75 after Banc of America raised its rating on Apple, the maker of the popular iPod digital music player, according to MarketWatch. For details, see [ID:nWNA3135].
Shares of copper miner Phelps Dodge Corp. jumped 4.8 percent to $85.39 on the NYSE, after Canada's Teck Cominco Ltd. sweetened its offer for base metals producer Inco Ltd. . The competing bid for Inco raises the prospect that Phelps' offer for the miner could fall through.
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The Fed's Poole, speaking in Louisville, Kentucky, said on Monday that reports show signs the economy is slowing, but the data also suggest inflationary pressures are rising and productivity numbers will likely be revised downward. "Therefore I am still at 50-50," he said, referring to the chances of rate increase.
Crude oil rose above $74 a barrel overnight after a leak on Russia's largest oil export pipeline to Europe, but U.S. crude for September later trimmed gains and was trading on the New York Mercantile Exchange at $73.25. (Additional reporting by Vivianne Rodrigues) ((Reporting by Ellis Mnyandu
Editing by Kenneth Barry
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