* Fed to keep buying $85 bln per month in assets
* Wal-Mart shares fall
* Dow off 0.02 pct; S&P 500 up 0.04 pct; Nasdaq off 0.3 pct
By Caroline Valetkevitch
NEW YORK, Dec 12 U.S. stocks ended nearly flat
on Wednesday, giving up most of the day's gains after Fed
Chairman Ben Bernanke reiterated that monetary policy won't be
enough to offset damage from the "fiscal cliff."
His comments followed the Federal Reserve's announcement of
a new stimulus plan, which briefly pushed the S&P 500 to a
The plan, the latest attempt to boost the country's
struggling economy, will replace a more modest program set to
expire with a fresh round of Treasury purchases that will
increase its balance sheet. The program is known as
"quantitative easing" or QE.
In comments after the announcement, Bernanke said he hopes
that markets won't have to tank to get a fiscal cliff deal.
"Initially the addition of QE was certainly favorable. I
think, though, in the press conference, what came out is that
there still seems to be a level of uncertainty with regard to
the exit strategy (and) the efficacy of the current policy,"
said Bucky Hellwig, senior vice president at BB&T Wealth
Management in Birmingham, Alabama.
Bernanke "reiterated the fact that monetary policy has its
hands tied as far as addressing the seriousness of going over
the fiscal cliff," Hellwig added.
The S&P financial sector index, which had been up
more than 1 percent after the Fed's announcement, ended up just
Wal-Mart Stores Inc's stock was the biggest drag on
the Dow, falling 2.8 percent to $68.94 following the Indian
government's announcement of an inquiry into the company's
The Dow Jones industrial average slipped 2.99 points,
or 0.02 percent, to 13,245.45 at the close. The Standard &
Poor's 500 Index inched up just 0.64 of a point, or 0.04
percent, to 1,428.48. But the Nasdaq Composite Index
shed 8.49 points, or 0.28 percent, to end at 3,013.81.
Though the S&P 500 ended up just slightly, it was the sixth
day of gains for the index - its longest winning streak since
The central bank committed to monthly purchases of $45
billion in Treasuries on top of the $40 billion per month in
mortgage-backed bonds it started buying in September. It also
said it will keep its near-zero interest-rate program in place
until the U.S. unemployment rate falls to 6.5 percent from its
current 7.7 percent.
Negotiations over plans to avoid the fiscal cliff
intensified in Washington, but U.S. House of Representatives
Speaker John Boehner said on Wednesday that "serious
differences" remain with President Barack Obama in their talks.
If no agreement is reached, steep tax hikes and budget cuts will
fall into place early next year.
Shares of Aetna, the third-largest U.S. health
insurer, gained 3.2 percent to $45.91, a day after the company
gave a higher forecast for profit and revenue growth in 2013.