Wall Street Closes With Modest Decline After Fed Ends Bond Buys

New York: US stocks closed with slight losses on Wednesday, finishing off their lows of the session, after the Federal Reserve ended its stimulative monthly bond-buying program and expressed confidence in US economic prospects.

Major indices were volatile following the US central bank's statement, with the S&P 500 down as much as 0.8 per cent before pulling back. Material shares were lower throughout the session, a decline in Facebook pressured the Nasdaq, but strength in energy and financial shares helped the market recover.

In a statement after a two-day meeting, the Fed ended its quantitative easing program of bond purchases, as had been expected. At its peak, the program pumped $85 billion a month into the financial system. The Fed also dropped a characterization of US labour market slack as "significant" in a show of confidence in the economy's prospects.

"The Fed had a little more of a hawkish bent than the market expected, but any weakness that came from the statement was obviously viewed as a buying opportunity," said Alan Gayle, director of asset allocation at RidgeWorth Investments in Atlanta, Georgia.

The Dow Jones industrial average fell 31.44 points, or 0.18 per cent, to 16,974.31.

The S&P 500 lost 2.75 points, or 0.14 per cent, to 1,982.3.

The Nasdaq Composite dropped 15.07 points, or 0.33 per cent, to 4,549.23.

Material shares fell 1.3 per cent after DuPont said there were "competitive advantages" to keeping its businesses together. Activist investor Nelson Peltz has urged DuPont to separate its various businesses in a move that has supported the company's shares. Shares of DuPont lost 1.7 per cent to $66.80.

Facebook Inc fell 6.1 per cent to $75.86 the day after the social network announced an increase in spending in 2015 and projected a slowdown in revenue growth this quarter.

After the market closed, shares of Visa Inc rose 3.6 per cent to $222.40. Visa reported its fourth-quarter results and announcing a stock buyback program of $5 billion.

Despite the turn lower, equities mostly held onto recent gains, with the S&P 500 up 6.4 per cent over the last nine sessions as earnings have mostly been strong. So far this reporting season, 75.3 per cent of S&P 500 companies have exceeded profit expectations, according to Thomson Reuters data, above the long-term average of 63 per cent.

Declining issues outnumbered advancers on the NYSE by 1,763 to 1,322, for a 1.33-to-1 ratio on the downside; on the Nasdaq, 1,437 issues fell and 1,245 advanced for a 1.15-to-1 ratio favoring decliners.

The benchmark S&P 500 index posted 65 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 114 new highs and 35 new lows.

About 7.08 billion shares traded on all US platforms, according to BATS exchange data, below the month-to-date average of 7.86 billion.

Copyright @ Thomson Reuters 2014