Market flat after Fed, Bernanke on tap

Reuters News
Posted: May 29, 2012 4:31 AM
By Ryan VlastelicaNEW YORK (Reuters) - Stocks were little changed on Wednesday after the Federal Reserve voted to extend a program to stimulate the economy, though it offered no clues on further easing.In Wall Street's initial reaction to the Fed announcement, major indexes dropped briefly, later paring their losses.The Fed said it would extend Operation Twist, aimed at lowering long-term interest rates, by swapping $267 billion in U.S. Treasury securities by the end of 2012. The program had been scheduled to end this month.Investors will get further detail on the central bank's plan when Chairman Ben Bernanke speaks at a news conference later on Wednesday."It would be more positive if the Fed thought we were on a strong enough recovery path that we didn't need stimulus, but this could help make slow and steady gains in the second half of the year more likely," said Eric Teal, chief investment officer at First Citizens Bancshares Inc in Raleigh, North Carolina, which manages $4.5 billion.Financial shares were the day's top gainers, with the sector rising 0.4 percent. Utilities and consumer staples, considered defensive stocks, were the weakest, falling 0.9 percent and 0.7 percent, respectively.The Dow Jones industrial average was down 0.53 points, or 0.00 percent, at 12,836.80. The Standard & Poor's 500 Index was down 1.10 points, or 0.08 percent, at 1,356.88. The Nasdaq Composite Index was up 3.20 points, or 0.11 percent, at 2,932.96.The Fed's action had been widely expected by market participants, and the anticipation fueled gains of about 7 percent in the S&P 500 from a five-month low hit earlier in June.European shares closed up 0.5 percent and at their highest since May 11 ahead of the Fed announcement.Procter & Gamble shares fell 3.3 percent to $60.17 after the world's largest household product maker cut its growth forecasts.Adobe Systems slid 2.2 percent to $32.14 after the maker of Photoshop and Acrobat software cut its full-year revenue outlook and warned about weak demand in Europe.(Editing by Kenneth Barry)