* Fed reduces asset purchases, upgrades economy assessment
* GDP shows stronger economic growth than expected in Q2
* Dow down 0.02 pct, S&P up 0.2 pct, Nasdaq up 0.6 pct
(Updates with reaction to Fed statement)
By Caroline Valetkevitch
NEW YORK, July 30 The S&P 500 turned higher
while the Dow pared losses on Wednesday after the Federal
Reserve raised its assessment of the U.S. economy while
reiterating it is in no hurry to increase interest rates.
The central bank also, as expected, cut its monthly asset
purchases to $25 billion from $35 billion.
Financial shares bounced, with the S&P financial index
helping to lead the S&P 500 higher. Shares of Wells
Fargo gained 1.4 percent to $52.26.
"We got the taper as expected and the real viewpoint of the
committee is they can keep monetary policy accommodative even
after we reach our inflation and employment goals," said Art
Hogan, chief market strategist at Wunderlich Securities in New
That suggests "we are going to start raising rates but it's
going to be some time in the first half of 2015 and that is
consensus - and consensus gets you a market that rallies," Hogan
The Dow Jones industrial average fell 3.75 points or
0.02 percent, to 16,908.36, the S&P 500 gained 3.43
points or 0.17 percent, to 1,973.38 and the Nasdaq Composite
added 25.13 points or 0.57 percent, to 4,467.83.
Earlier Wednesday, government data showed gross domestic
product grew at a 4 percent annual rate in the second quarter,
above the 3 percent rate that had been expected and a sharp
reversal from the weather-impacted first quarter, when the
economy contracted a revised 2.1 percent.
Separately, the ADP National Employment Report showed
companies hired 218,000 workers in July, below analysts'
projections and less than June's total.
(Editing by Nick Zieminski and Bernadette Baum)