* Fed raises interest rates 25 bps, as expected
* Energy stocks fall as the crude falls sharply
* Indexes down: Dow 0.14 pct, S&P 0.26 pct, Nasdaq 0.13 pct
(Updates with Fed decision)
By Rodrigo Campos
NEW YORK, Dec 14 U.S. stocks fell in volatile
trading on Wednesday after the Federal Reserve raised interest
rates by a quarter point and signaled hikes could come next year
at a faster pace than some expected.
The Fed's decision comes as President-elect Donald Trump,
who will be sworn in next month, is seen cutting taxes and
increasing spending on infrastructure. Central bank policymakers
shifted their outlook to one of slightly faster growth and lower
"The Fed ramped up the pace of rate hikes on a hope and a
prayer of faster growth in 2017," said Brian Jacobsen, chief
portfolio strategist at Wells Fargo Funds Management in
Menomonee Falls, Wisconsin.
"Until Trump's tax and spending plan actually gets
implemented, it's hard to justify the slight increase in the
slope of rate hikes."
The Dow Jones industrial average fell 27.9 points, or
0.14 percent, to 19,883.31, the S&P 500 lost 6.02 points,
or 0.26 percent, to 2,265.7 and the Nasdaq Composite
dropped 7.17 points, or 0.13 percent, to 5,456.66.
Since the Nov. 8 U.S. presidential election, stocks have
risen on bets that Trump will enact business-friendly policies
and stimulate the economy. However, some market participants are
concerned that equities are pricing in a very favorable
scenario, leaving them vulnerable.
Markets had all but priced in a rate increase at the Fed but
the faster pace of increases seen next year may give traders an
excuse to cash in the recent gains.
"I'm beginning to think the market might be looking for an
excuse to take some profits," said David Schiegoleit, managing
director at U.S. Bank Private Client Reserve in Los Angeles.
"We've had such a strong run here for the past couple of
weeks that any excuse to take some money off the board might
hold a little bit more water than usual. That could be what we
see here and heading into the close."
Oil prices fell more than 3 percent on renewed concerns
about an oil glut sparked by rising U.S. crude inventories in
Oil major Exxon declined 1.6 percent and was among
the largest drags on the Dow.
Declining issues outnumbered advancing ones on the NYSE by a
2.47-to-1 ratio; on Nasdaq, a 2.29-to-1 ratio favored decliners.
The S&P 500 posted 30 new 52-week highs and 1 new lows; the
Nasdaq Composite recorded 102 new highs and 38 new lows.
(Reporting by Rodrigo Campos, additional reporting by Chuck
Mikolajczak; Editing by Nick Zieminski)