* Fed holds steady with bond buying, gives weaker growth
* Private-sector employment below expectations, inflation
* General Motors rallies, profit leaps on strong demand
* Dow down 0.3 pct, S&P 500 off 0.4 pct, Nasdaq off 0.6 pct
By Ryan Vlastelica
NEW YORK, Oct 30 U.S. stocks fell on Wednesday,
putting the S&P 500 on track to snap a four-day streak of gains
after the Federal Reserve said it had a weaker growth outlook
for the economy, even as it held steady with its stimulus
program for the time being.
Trading was volatile following the release of the statement,
with major indexes briefly cutting their losses before turning
south to drop to session lows. Almost three-fourths of stocks
traded on the New York Stock Exchange declined, while all 10 S&P
500 sector indexes fell.
While it had been widely expected that the U.S. central bank
wouldn't announce any adjustments to its bond-buying program,
the statement wasn't enough to extend a rally that has taken
both the Dow and S&P 500 to repeated record highs.
"While there were essentially no changes between this
statement and previous ones, it is clear that even this wasn't
as dovish as some investors were expecting, especially with the
bull market getting a bit long in the tooth," said Michael
Mullaney, who oversees about $10.7 billion as chief investment
officer of Fiduciary Trust Co in Boston.
While the Fed's stimulus has kept a floor under equity
prices this year, there have been signs that growth is slowing,
including weak economic data and an earnings season marked by
tepid revenue growth.
The Dow Jones industrial average was down 47.52
points, or 0.30 percent, at 15,632.83. The Standard & Poor's 500
Index was down 7.57 points, or 0.43 percent, at 1,764.38.
The Nasdaq Composite Index was down 21.80 points, or
0.55 percent, at 3,930.53.
Many analysts expect a delay until at least March in easing
the stimulus measures, which have encouraged investors to buy
riskier assets, like stocks, contributing to the S&P 500's gain
of more than 20 percent this year.
The central bank has held interest rates near zero since
late 2008 and quadrupled the size of its balance sheet to more
than $3.7 trillion through three rounds of bond buying.
Private-sector employers hired the fewest workers in six
months in October, according to a report released on Wednesday,
while the consumer price index showed benign inflation. Both
indicators supported the Fed's stimulus policy.
In the latest batch of earnings, General Motors Co
rose 3.1 percent to $37.18 after the U.S. automaker reported
stronger-than-expected quarterly profit because of strength in
its core North American market and a smaller-than-anticipated
loss in Europe.
On the downside, Yelp Inc dropped 4.9 percent to
$65.43 a day after it reported a wider third-quarter loss, while
Western Union shares slid 12.7 percent to $16.80 after
posting a steep drop in third-quarter earnings.
"Earnings haven't been amazing, but they've been steady and
sustainable, which the market likes enough to help us reach
all-time highs," said Andres Garcia-Amaya, global market
strategist at J.P. Morgan Funds, in New York, which has $400
billion in assets under management.
"When the season ends and we focus on the macro again, that
probably won't be good for the market."
Of the 313 companies in the S&P 500 that had reported
earnings through Wednesday morning, 68.4 percent have topped
Wall Street expectations, above both the 63 percent beat rate
since 1994 and the 66 percent rate for the past four quarters,
according to Thomson Reuters data.
Revenue performance has been mixed, however, with 53.7
percent of S&P 500 companies beating expectations, well below
the 61 percent average since 2002, but slightly above the 49
percent rate for the last four quarters.