New York: The Dow fell for the fourth day and other indexes ended well off the day’s highs on Wednesday after the Federal Reserve reiterated concerns about the economic outlook at the end of its policy meeting.
Technology shares sustained some strength, bolstered by stronger-than-expected quarterly results from software maker Oracle Corp.
The Fed, as expected, left the benchmark fed funds rate at almost zero, and said it would continue its program of purchasing US government bonds and mortgage-related debt.
Stocks pulled back after the Fed did not suggest in its statement that it sees any notable recovery any time soon.
“The Fed is a little more downbeat than the market has been ... that they’re emphasizing the weakness is a touch disappointing to me and to the markets,” said Jim Awad, managing director at Zephyr Management in New York.
Before the release of the Fed’s statement, all three major stock indexes were solidly higher, with the Nasdaq up more than 2%. Investors were encouraged by a stronger-than-expected report on monthly durable goods orders, which pointed to increased economic demand.
The Fed’s words on the economic outlook were mixed. The central bank said the economy was likely to remain weak for a time, but the contraction’s pace was slowing.
The Dow Jones industrial average was down 23.05 points, or 0.28%, at 8,299.86. But the Standard & Poor’s 500 Index was up 5.84 points, or 0.65%, at 900.94. The Nasdaq Composite Index was up 27.42 points, or 1.55%, at 1,792.34.
Oracle’s results boosted other technology shares and helped drive the PHLX semiconductor index up 1.7%. Oracle shot up 7% to $21.26 and ranked among the Nasdaq’s top advancers.
“You had the good durable number, the good Oracle number that kind of got things going,” said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.
Data before the opening bell showed new orders for durable goods, which are long-lasting US manufactured products such as refrigerators and washing machines, increased by a much stronger-than-expected 1.8% in May, and the median price of new homes hit its highest level since December, even though sales slipped, economic data showed.
The broad S&P 500 index is up 33.2% from a 12-1/2-year closing low on 9 March, but it had soared as much as 40 percent during the spring rally.
Trading volume was below average on the New York Stock Exchange, with only about 1.10 billion shares changing hands, under last year’s estimated daily average of 1.49 billion, while on the Nasdaq, about 2.16 billion shares traded, below last year’s daily average of 2.28 billion.