US STOCKS-Wall St edges lower as Fed keeps stimulus in place
* Fed notes economic pullback, says likely temporary
* Amazon rallies after results, Boeing also up
* RIM changes name, unveils phones, shares fall
* Indexes: Dow off 0.1 pct, S&P off 0.1 pct, Nasdaq off 0.1 pct
By Angela Moon
NEW YORK, Jan 30 (Reuters) - U.S. stocks edged lower on Wednesday after the Federal Reserve left in place its bond-buying stimulus plan, saying economic growth had stalled but indicating the pullback was likely temporary.
Describing the U.S. job market as continuing its modest pace of improvement, the Fed repeated a pledge to keep purchasing securities until employment improves substantially.
The statement from the Fed follows data that showed the economy, as measured by gross domestic product, unexpectedly contracted in the fourth quarter. Economists stressed that the 0.1 percent contraction, caused partly by a plunge in government spending and lower business inventories, is not an indicator of recession.
"It is interesting that the Fed decided to focus on the GDP report, pointing to how activity slowed because of transitory factors. That sums up the GDP report. I am a bit puzzled why the Fed focused solely on one report. I would argue that this was a slightly dovish report," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.
The Dow Jones industrial average was down 13.32 points, or 0.10 percent, at 13,941.10. The Standard & Poor's 500 Index was down 1.90 points, or 0.13 percent, at 1,505.94. The Nasdaq Composite Index was down 2.11 points, or 0.07 percent, at 3,151.55.
The S&P 500 held above 1,500, seen by technical analysts as an inflection point that will determine the overall direction in the near term. The index is on track to post its best month since October 2011 and its best January since 1997.
"This is a very modest pullback after a steep run," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.
"It is too soon for the Fed to start talking about the end of (their bond buying program); the economy needs stimulus to sustain this recovery."
Both Boeing Co and Amazon.com shares gained after earnings beat expectations, continuing a trend this quarter of high-profile names advancing after results.
Amazon rose 5.1 percent to $273.51 and Boeing rose 1.1 percent to $74.43.
Thomson Reuters data showed that of the 192 companies in the S&P 500 that have reported earnings this season 68.8 percent have been above analyst expectations, which is a higher proportion than over the past four quarters and above the average since 1994.
Chesapeake Energy rose 8 percent to $20.48 a day after it said Aubrey McClendon would step down as chief executive. The last year has been marked by civil and criminal probes into the second-largest U.S. natural gas producer.
Research In Motion shares fell 6.3 percent to $14.67 after the company, which is changing its name to BlackBerry, unveiled a long-delayed line of smartphones in hopes of a comeback into a market it once dominated.
Giving the market extra support, private sector employment topped forecasts with the ADP National Employment report showing 192,000 jobs added in January, higher than the 165,000 expectation.
- Tweet this
- Share this
- Digg this
- Putin admits Russian forces were deployed to Crimea
- South Korea investigates capsized ferry crew, stowage as rescue hampered |
- UPDATE 7-Tennis-Monte Carlo Masters men's singles round 3 results
- Singer Chris Brown's bodyguard on trial for assault
- Search for Malaysia jet refocuses on drone scans of sea floor