* Fed holds steady with bond buying, gives weaker growth
* Private-sector employment below expectations, inflation
* General Motors rallies, profit leaps on strong demand
* Facebook and Expedia rally in extended trading, Starbucks
* Dow off 0.4 pct, S&P 500 down 0.5 pct, Nasdaq off 0.6 pct
By Ryan Vlastelica
NEW YORK, Oct 30 U.S. stocks fell on Wednesday,
with the S&P 500 snapping 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 the major U.S. stock indexes cutting losses to turn flat
and dropping to session lows. Almost 70 percent of stocks on
both the New York Stock Exchange and Nasdaq 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 driven
both the Dow and the S&P 500 to repeated record highs, including
in early trading on Wednesday.
"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 stock prices
this year, there have been signs that growth is slowing,
including weak economic data and an earnings season marked by
tepid revenue growth.
In trading following the market's close, Facebook Inc
soared 9.7 percent to $53.78 after the social networking company
reported revenue that was stronger than expected. Expedia Inc
surged 18 percent to $58.50 after reporting its
On the downside, Starbucks Corp shares fell 2.8
percent to $78.60 after the bell because the world's biggest
coffee chain gave a 2014 profit outlook that was below
The Dow Jones industrial average slipped 61.59
points, or 0.39 percent, to end at 15,618.76. The Standard &
Poor's 500 Index dropped 8.64 points, or 0.49 percent, to
finish at 1,763.31. The Nasdaq Composite Index fell
21.72 points, or 0.55 percent, to close at 3,930.62.
The Dow industrials hit a record intraday high of 15,721
shortly after Wednesday's opening bell, while the S&P 500 also
reached a lifetime intraday high of 1,775.22 early in the
Many analysts expect the Fed to delay until at least March
in easing the stimulus measures that 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 U.S. consumer price index showed benign inflation.
Both indicators supported the Fed's stimulus policy.
In the latest batch of earnings, General Motors Co
rose 3.2 percent to $37.23 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 2.6 percent to
$67.05 a day after it reported a wider third-quarter loss, while
Western Union shares slid 12.4 percent to $16.85 after
the company posted 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's 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.