TRADING on the New York Stock Exchange dropped to the lowest level this year, a sign that changing profit forecasts are making investors reluctant to buy or sell stocks before companies report first-quarter results.

About 1.2 billion shares traded on the NYSE on Tuesday, the least since December 31. Over the past four days, an average 1.24 billion shares changed hands, 27 percent lower than the 1.69 billion daily average this year. Volume on the NYSE this year had jumped to 1.72 billion shares a day through April 2 and was on pace to climb to a record, according to Bloomberg News data.

Analysts surveyed by Bloomberg News have cut their estimates for Standard & Poor's 500 Index companies' first-quarter profits every week this year as evidence grows that the economy may be in a recession. They now forecast a drop of 11.3 percent, compared with an increase of 4.7 percent at the start of 2008.

The first S&P 500 companies began reporting earnings this week, including Alcoa Inc, which said profit fell by a worse-than-projected 54 percent.

"Given the uncertainty on how the economic downturn will ultimately impact profits, investors have decided to sit on their hands and take a wait-and-see attitude," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago, which oversees about US$62 billion.

The Federal Reserve said some policy makers were concerned about "a prolonged and severe economic downturn," according to minutes released on Tuesday of the March 18 Federal Open Market Committee meeting.

The minutes showed the Fed found little evidence that the worst housing slump in at least a quarter century has hit bottom.

The S&P 500 swung by 9.54 points in Tuesday's trading, the smallest fluctuation since December 7. The index fell 0.5 percent to 1,365.54.