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Stocks fell in the final hour of trading to close lower Wednesday after Fed chairman Ben Bernanke acknowledged that the pace of the economic recovery is slower than expected, but offered no hint about plans for new stimulus measures.
The Dow Jones Industrial Average tumbled 80.34 points, or 0.66 percent, to close at 12,109.67. The blue-chip index snapped a four-day winning streak, after trading flat for most of the session. Home Depot [HD Loading... () ] and Boeing [BA Loading... () ] were among the biggest laggards.The S&P 500 slipped 8.38 points, or 0.65 percent, to end at 1,287.14. The tech-heavy Nasdaq declined 18.07 points, or 0.67 percent, to finish at 2,669.19. The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded below 19. All 10 key S&P sectors finished lower, led by consumer discretionary and techs. The Federal Reserve said the pace of the recovery was proceeding more slowly than it had expected though it was primarily because of temporary factors. In addition, the Fed's policysetting committee said it will maintain interest rates at exceptionally low levels for "an extended period."Meanwhile, the FOMC downgraded economic growth forecast by half a percentage point and expects higher unemployment until 2013 in addition to slightly more inflation. "The reduced pace of the recovery partly reflects factors that are likely to be temporary," Bernanke said during the press conference. "Consequently...the committee expects that the pace of economic recovery will pick up overcoming quarters."Some experts said traders were disappointed that Bernanke failed to expand on further plans to stimulate the economy, while others noted that it may never happen unless macro data continues to disappoint. "The only way that [the Fed] could possibly consider QE3 is if the macro data refuses to improve and the market starts to take a real hit—another 15 percent from here," said Kenny Polcari, managing director of ICAP Equtiies. "But if that doesn’t happen and if things just muddle along, then I don’t think there will or should be any QE3." Volume continued to be light with the consolidated tape of the NYSE at 3.2 billion shares, while just 853 million shares changed hands on the floor. BofA [BAC Loading... () ] , Citigroup [C Loading... () ] and JPMorgan [JPM Loading... () ] ended mixed after JMP Securities cut its share views on the banks. In earnings news, FedEx [FDX Loading... () ] gained after the shipping service giant posted better-than-expected profits and expect robust earnings in 2012. S&P Equity raised its price target on the firm to $120 from $113 and JPMorgan resumed coverage with an "overweight" rating. Rival UPS [UPS Loading... () ] also rose following the news. Adobe [ADBE Loading... () ] tumbled after the software maker reported earnings and revenue that topped analysts forecasts Tuesday but its outlook fell short. In addition, Brigantine cut its price target on the firm to $34 from $36. CarMax [KMX Loading... () ] jumped to lead the S&P gainers after the used-car retailer's quarterly results blew past estimates as consumer continued to stay away from purchasing new cars in a slow-recovering economy. And Jabil Circuit [JBL Loading... () ] gained after the contract manufacturer reported earnings that beat estimates, thanks to a jump in revenue, but the firm expects current quarter profit largely below forecast. Meanwhile, RBC cut its price target on the company to $25 from $30. Bed, Bath & Beyond [BBBY Loading... () ] is scheduled to post earnings after-the-bell tonight.L3 Communications [LLL Loading... () ] climbed after investment firm Relational Investors reported the largest stake of almost 6 percent in the major defense contractor. Philips Electronics [PHG Loading... () ] plunged after the world's biggest lighting maker warned of sharply lower profits at two of its three key divisions and said it would announce cost cuts soon.Yahoo [YHOO Loading... () ] was slightly lower after the search-engine firm said they have made progress towards an agreement with Alibaba over the e-payment unit Alipay. Research In Motion [RIMM Loading... () ] slipped to hit another 52-week low after the BlackBerry maker was removed from UBS' list of top tech picks. RIM shares have plunged more than 50 percent year-to-date. Meanwhile, Dentsply International [XRAY Loading... () ] advanced after the firm agreed to buy AstraZeneca's [AZN Loading... () ] dental implants and medical devices unit for $1.8 billion in cash. Oil extended gains after crude supplies dropped by 1.7 million barrels last week, according to a government report. U.S. light, sweet crude climbed $1.24 to settle at $95.41 a barrel, while London Brent crude rose $3.26 to settle at $114.21. On the economic front, weekly mortgage applications fell last week as refinance demand dropped and interest rates rose, according to the Mortgage Bankers Association. The confidence vote was passed in parliament and enables the Greek government to push ahead with tough austerity measures which are key to avoid a default. However, fears that new bailout funds will not be unlocked remain a cause for concern. European shares fell amid concerns that the Fed will be able to further prop up a weakening recovery.Coming Up This Week: WEDNESDAY: Earnings from Bed Bath & BeyondTHURSDAY: Weekly jobless claims, new home sales, money supply, Yahoo shareholders meeting; Earnings from ConAgra, Discover Financial, Oracle, Accenture, Micron
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