Stocks fell yesterday, as morning gains gave way to a return of pessimism over the US economy with the release of the Federal Reserve's Beige Book survey of economic conditions.

"Most districts report that economic activity was little changed or decelerating in April and May," the central bank said in its Beige Book, named for the colour of the report's cover. The report is based on information gathered before June 4th.

"I would expect for the next few weeks we are going to get economic numbers that show slow growth and moderate inflation and we are going to get earnings releases that are not good," said Mr Tony Dwyer, chief market strategist at Kirlin Holdings.