* Fed maintains pace of bond purchases
* Adobe, FedEx shares rise after results
* Indexes off: Dow 0.9 pct, S&P 500 0.9 pct, Nasdaq 0.8 pct
By Ryan Vlastelica
NEW YORK, June 19 U.S. stocks fell 1 percent in
a volatile session on Wednesday, with losses accelerating after
Federal Reserve Chairman Ben Bernanke said a reduction in the
rate of stimulus could occur this year if the economy continues
Shortly before Bernanke spoke at a news conference, stocks
fell modestly after Fed policymakers said in a statement the Fed
would keep buying $85 billion in bonds per month and gave no
explicit indication that it was close to scaling back the
Equities swung between session lows and break-even levels in
afternoon trading on uncertainty over the Fed's stimulus
program, which has been key to the market's rally this year.
Bond yields rose on expectations of reduced Fed bond buying.
"I was surprised he addressed the issue of tapering, since
last time he did we saw a fairly significant market hiccup,"
said Randy Bateman, chief investment officer of Huntington Asset
Management in Columbus, Ohio.
"If the economic growth we have is sustainable without the
Fed, that's good news," added Bateman, who helps oversee $15
billion. "But it is hard to wean the system off the easy money."
The Dow Jones industrial average fell 138.24 points
or 0.9 percent, to 15,179.99, the S&P 500 lost 14.34
points or 0.87 percent, to 1,637.47 and the Nasdaq Composite
dropped 26.11 points or 0.75 percent, to 3,456.07.
The benchmark 10-year U.S. Treasury note was
down 39/32, with the yield at 2.3271 percent.
The S&P 500 has regained some losses in the last few days as
confidence increased that the Fed will leave the current
stimulus in place even if Bernanke nods at the need to begin
reducing bond purchases later in the year.
The stimulus helped the stock market reach a record high on
May 21, one day before Bernanke said the Fed could reduce its
bond-buying in the "next few meetings" if the economy gained
momentum. His comments rocked markets, boosting bond yields and
halting stocks' rally.
Despite the increased volatility of the past month, the
market has moved largely sideways. The S&P 500 closed on Tuesday
just 1 percent below its record high of 1,669.16 on May 21.
Shares of Adobe Systems Inc rose 6.4 percent to
$46.12 a day after the maker of Photoshop and Acrobat software
reported a higher-than-expected adjusted quarterly profit and
said demand rose for Creative Cloud, the subscription-based
version of its flagship software package.
FedEx Corp reported higher quarterly profit than
expected as its ground shipment business improved. It also said
jet fuel prices dropped. Shares were up 1.7 percent at $101.20.