Stocks Finish Mixed; Fed Keeps Twisting
NEW YORK (TheStreet) -- Stocks finished mixed Wednesday as investors expressed mild disappointment with the Federal Reserve's much-anticipated decision to prolong its Operation Twist bond maturity extension program.
The central bank also lowered its expectations for U.S. gross domestic product growth in 2012, going to a range of 1.9-2.4% from 2.4-2.9%, and adjusted its projections for employment data to reflect slowing growth.
The Fed drama led to a choppy session for the major U.S. equity indices. The initial news prompted a sharp sell-off that but stocks battled back into positive territory before again turning lower as Fed Chairman Ben Bernanke met the press later in the day and the updated economic expectations were disclosed.
Bernanke didn't offer up many surprises during the media Q&A session, staying circumspect about what it would take for the central bank to embark on another round of quantitative easing. He acknowledged that Europe's woes have slowed U.S. economic growth.
"We are hopeful that Europe will take additional measures and do what it takes to stabilize the situation," Bernanke said, adding that he believes eurozone policymakers have a very strong incentive to "get it right."
The Dow Jones Industrial Average fell 13 points, or 0.10%, to close at 12,824. The blue-chip index sank as low as 12,745 after the Fed decision was announced but recovered to range as high as 12,877 later in the day.
The S&P 500 lost more than 2 points, or 0.17%, to finish at 1356. The index, which ranged between 1347-1362 on the day, snapped a four-day winning streak.
The Nasdaq managed an incremental gain, adding less than a point, or 0.02%, to settle at roughly 2930.
The Fed's policy statement said that the central bank plans continue its program to extend the average maturity of its holdings of securities through the end of the year. The Fed plans to purchase bonds with remaining maturities of six years to 30 years at its current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of about three years or less.