U S stocks edged lower yesterday 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 US 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 per cent 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 US economist at RBC Capital Markets
The Dow Jones industrial average was down 44.00 points, or 0.32 per cent, at 13,910.42. The Standard & Poor’s 500 Index was down 5.88 points, or 0.39 per cent, at 1,501.96. The Nasdaq Composite Index was down 11.35 points, or 0.36 per cent, at 3,142.31.
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.
Both Boeing 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 per cent to $273.51 (£173.15) and Boeing rose 1.1 per cent to $74.43.