Small caps lower midday

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are in the red due to news of poor earnings and concerns that interest rates will not fall. At 1:35 p.m. ET, the small-cap index had shed 2.78 points, or 0.34%, to 818.94. The Dow was off 40.88 points, or 0.29%, to 13,829.38.

Investors hoping for a sizeable drop in the U.S. Federal Reserve’s target interest rate may be disappointed, according to an article in The Wall Street Journal. The paper claims that policy makers, who kicked off their two-day meeting this morning, will likely either cut the federal funds rate 0.25% or leave it unchanged.

That was enough to scare away the bulls, and stocks opened in negative territory.

Contributing to the bearish mood was news that United States Steel Corp.’s (NYSE: X) third-quarter net income missed analysts’ projections by falling 35% due to costs associated with an acquisition.

Cincinnati, Ohio-based consumer goods giant The Procter & Gamble Co. (NYSE: PG) also had bad news to report, saying that its profit margin will come under pressure in the coming months due to higher energy costs.

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