Stock prices traded slightly lower Wednesday after the Federal Reserve said it was still too early to begin the tapering of financial stimulus.
The Dow Jones Industrial Average, which closed at a record high Tuesday, dropped 61.59 points to 15,618.76. The Nasdaq Composite Index was down 21.72 points to 3,930.62, and the Standard & Poor’s 500 Index fell 8.64 points to 1,763.31.
The Fed concluded its two-day meeting by saying the labor markets still are not performing up to expectations despite modest growth in the economy. It did not change any policy.
Oil prices dropped to a new four-year low after a report showed crude reserve rose for the sixth consecutive week. Oil closed at $96.77 a barrel, down $1.43. Gold was up $3.80 to $1,349.30 an ounce.
LinkedIn Corp. (NYSE: LNKD) lost 9.3 percent after its quarterly sales outlook missed analysts’ predictions. Western Union Co. (NYSE: WU) tumbled 12 percent after saying costs tied to regulatory compliance will prevent operating profit from rising next year.
General Motors Co. (NYSE: GM) gained 3.2 percent as quarterly profit topped estimates. Facebook Inc. (Nasdaq: FB) jumped 10 percent after the market closed as it released results.
About 6.4 billion shares changed hands on U.S. exchanges, 7.4 percent above the three-month average.
The Fed decided to press on with the $85 billion in monthly bond purchases that have helped propel the S&P 500 higher by more than 160 percent from a 12-year low in 2009.
The gauge has surged 4.9 percent in October, heading for the biggest monthly gain in two years, as lawmakers ended a 16-day government shutdown and agreed to extend the U.S. borrowing authority, avoiding a possible debt default.
The Fed removed a sentence from its previous policy statement that had said tighter financial conditions could slow the improvement in the economy, sparking speculation it could cut stimulus in the coming months.
The central bank was expected to maintain the pace of assets purchases at the current level until March 2014, according to a Bloomberg survey this month.
The Fed left unchanged its statement that it will probably hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5 percent, so long as the outlook for inflation is no higher than 2.5 percent. A report today showed the cost of living in the U.S. rose 0.2 percent as projected in September, capping the smallest year-to-year gain in five months.
Separate data based on payrolls showed companies added fewer workers than projected in October, adding to signs that growth slowed in the weeks before the shutdown.
The government closure will reduce economic growth by 0.3 percentage points this quarter at an annual rate, according to a Bloomberg News survey of economists.
Facebook, which is not in the gauge, rallied 10 percent to $54.11 after hours. The world’s largest social network reported third-quarter sales that topped analysts’ estimates as advertisers boosted spending on promotions targeting users on smartphones and tablets.
The stock fell 0.8 percent to $49.01 in the regular session for a fourth day of losses. It closed at a record $54.22 on Oct. 18.
All 10 main S&P 500 groups dropped at least 0.2 percent today. Utilities and consumer-staples stocks fell the most, dropping more than 0.6 percent.
LinkedIn lost 9.3 percent, the most since May, to $224.11. The world’s biggest professional-networking site said fourth-quarter revenue will be $415 million to $420 million. That trailed the average analyst estimate of $438.9 million.
Western Union Co. tumbled 12 percent to $16.85 for the biggest slide in the S&P 500 and its lowest level since July 2. The largest money-transfer business reported a drop in third-quarter profit.
U.S. Steel Corp. (NYSE: X) slid 2.9 percent to $24.72. The largest U.S. producer of the metal will permanently close parts of two plants as it cuts costs after four unprofitable quarters.
General Motors gained 3.2 percent to $37.23. The largest U.S. automaker posted third-quarter profit that beat estimates as North American earnings, boosted by redesigned large pickups, helped buffer international losses.
Electronic Arts Inc. (Nasdaq: EA) rallied 7.8 percent to $26 for the biggest gain in the S&P 500. The second-largest U.S. video-game publisher was raised to “strong buy” from “hold” by Needham & Co. by equity analyst Sean McGowan.