U.S. MARKET AVERAGES

Stock averages traded lower, awaiting the Fed Reserve’s decision on interest rates at the policy makers' final meeting under Alan Greenspan's leadership.

The Federal Open Market Committee is expected to announce that it's raising its key interest rate by a quarter point to 4.5%, the 14th straight rise.

Mixed earnings reports also hurt market sentiment. The Dow Jones was under pressure after component Altria Group Inc. missed Wall Street's profit expectations for the fourth quarter, though that news was offset by strong profits at drugmaker Merck & Co.

The gold sector steadily advanced during the morning session, extending recent gains and stretching its 52-week high. The airline sector was the best performer on the day, posting a gain at of 1.2% and pushing above a 2-week trading range.

The semiconductor sector moved to the downside, extending Monday's decline to show a loss of about 1%. The insurance and housing sectors were also conspicuous losers.

Archer Daniels Midland (ADM: chart) broke to a new 52-week high, after its quarterly results prompted an 11% rally. Art Technology Group (ARTG: chart) also jumped to a new peak on positive earnings news.

Dow component Johnson & Johnson (JNJ: chart) was the most notable decliner, setting a new 52-week low. Tribune (TRB: chart) resumed the downward trend, moving to a fresh low.

In early afternoon trading, the Dow Jones industrial average fell 24.09, or 0.22%. The Standard & Poor's 500 index lost 5.50, or 0.43%, and the Nasdaq composite index dropped 8.40, or 0.36%.

Bonds were little changed, with the yield on the 10-year Treasury note steady at 4.52% from late Monday.

MOVERS AND SHAKERS

Waddell & Reed Financial (WDR: chart) reported Q4 net income decline of $19.9 million, or 24 cents a share, down from $25.7 million, or 31 cents a year ago, missing estimates of 30 cents a share on revenue of $163 million. Revenue rose 11.1%, reaching $163.1 million from $146.9 million, paced by growth in investment-management fees. The stock dropped 6%.

Altria Corp (MO: chart) reported Q4 earnings from continuing operations of $2.29 billion, or $1.09 a share, up from a year-ago equivalent profit of $1.99 billion, or 96 cents a share on 9.4% revenue growth, missing estimates for a profit of $1.17 a share. For fiscal 2006 the company sees earnings from continuing operations of $4.85 to $4.95, excluding expected restructuring charges. The stock fell 1.1%.

Napster (NAPS: chart) surged 44% following a report in the New York Post that Google is considering an alliance with the digital music company that could lead to an outright acquisition.

Sepracor Inc (SEPR: chart) swung to a Q4 profit of $37.2 million, or 32 cents a share, exceeding expectations of 5 cents a share. Revenue soared to $311 million from $131 million, on sales of Xopenex and Lunesta medications. For 2006 the company projected earnings of $1.50 a share on revenue of $1.275 billion. The stock rose 14.5%.

ECONOMIC NEWS

The Conference Board released its report on consumer confidence in the month of January on Tuesday, showing that confidence improved more than economists had been expecting. The Consumer Confidence Index rose to its highest level in more than three years.

The report showed that the Consumer Confidence Index rose to 106.3 in January from an upwardly revised 103.8 in December. Economists had expected the index to increase to 105.0 compared to the 103.6 originally reported for December.

The Conference Board's Present Situation Index rose to 128.4 in January from 120.7 in December, with those claiming conditions are good increasing to 25.8 percent from 24.4 percent.

The increase was partly due to continued improvement in the assessment of the labor market, with those saying jobs are plentiful rising to 26.9 percent in January from 23.3 in December. Those claiming jobs are hard to get decreased to 20.3 percent from 22.5 percent.