* S&P extends losses, Dow goes negative after Fed decision
* Energy index tumbles as U.S. crude oil enters bear market
* Bank stocks pare gains
* Indexes down: Dow 0.13 pct, S&P 0.42 pct, Nasdaq 0.73 pct (Updates to mid-afternoon, adds commentary, changes byline, adds NEW YORK dateline)
By Sinéad Carew
NEW YORK, Nov 8 (Reuters) - The S&P 500 extended its losses slightly on Thursday afternoon after a Federal Reserve statement, and energy stocks led the declines as oil prices fell.
The U.S. central bank said ongoing strong job gains and household spending were keeping the economy on track but business investment “moderated from its rapid pace earlier in the year,” creating a possible drag on future economic growth.
Aside from the Fed’s comment about business investments, many investors said the statement was largely as expected and suggested that the Fed’s next rate hike would be in December.
But some investors were hoping for a change in tone.
“There are those people who are unsatisfied by this statement because they were looking for a more dovish tone after last month’s market volatility,” said Gene Tannuzzo, deputy global head of fixed income at Columbia Threadneedle in Minneapolis. “That’s why we see short-term yields ticked up and stocks down here. They are still on track.”
At 3:17PM ET, the Dow Jones Industrial Average fell 33.22 points, or 0.13 percent, to 26,147.08, the S&P 500 lost 11.76 points, or 0.42 percent, to 2,802.13 and the Nasdaq Composite dropped 55.15 points, or 0.73 percent, to 7,515.61.
The S&P bank index erased its gains and turned negative after the news as bank profits benefit from rising rates.
Energy stocks were the S&P’s biggest drag with a 2.1 percent decline as U.S. crude oil futures entered a bear market, falling more than 20 percent from their Oct. 3 high.
The Wall Street Journal reported that Saudi Arabia’s top government-funded think-tank is studying the possible effects on oil markets of a breakup of OPEC in a story citing unnamed people familiar with the matter.
Declining issues outnumbered advancing ones on the NYSE by a 1.39-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.
The S&P 500 posted 33 new 52-week highs and two new lows; the Nasdaq Composite recorded 72 new highs and 71 new lows. (Additional reporting by Richard Leong, April Joyner, Caroline Valetkevitch, Lewis Krauskopf and Jessica Resnick-Ault in New York and Sruthi Shankar in Bengaluru; Editing by Chizu Nomiyama and James Dalgleish)