(Adds closing market prices) By Bruno Federowski SAO PAULO, May 3 (Reuters) - Brazilian stocks fell on Wednesday following a mixed batch of corporate earnings and ahead of a key vote on an overhaul of the country's pension system in Congress.
The benchmark Bovespa stock index slipped 0.94 percent after rising 2 percent on Tuesday, with many traders taking a cautious stance as a congressional committee prepared to vote on the planned pension reform.
Investors see reduced pension spending as crucial to efforts to rein in public debt and pull Brazil out of its deepest recession in decades.
Shares of lender Itaú Unibanco Holding SA weighed on the index after rising defaults kept it from cutting loan-loss provisions as much as investors expected in the first quarter.
Traders were also disappointed by Itaú's net income, which came in only slightly above analyst forecasts. Many had bet on stronger figures after earnings by rival Santander Brasil SA handily beat expectations.
Shares of payment processor Cielo SA also slumped as declining revenues fueled concerns over its outlook despite higher-than-expected profits.
The U.S. Federal Reserve kept interest rates unchanged on Wednesday and downplayed weak economic growth while emphasizing the strength of the American labor market, in a sign it was still on track for two more rate rises this year.
The Fed's decision did not appear to have a big impact on currencies in the region. The Brazilian real ended 0.14 percent weaker against the dollar, while the Mexican and Chilean pesos slipped slightly and the Argentine and Colombian pesos firmed.
Traders expect the real to be volatile in coming months on fears that lawmakers could block key austerity measures, a Reuters poll showed.
Key Latin American stock indexes and currencies at 2047 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 985.74 -0.25 14.32 MSCI LatAm 2,642.48 -0.75 12.9 Brazil Bovespa 66,093.78 -0.94 9.74 Mexico IPC 49,099.98 -0.99 7.57 Chile IPSA 4,854.88 -0.48 17.44 Chile IGPA 24,349.26 -0.48 17.44 Colombia IGBC 10,202.49 -0.08 0.73 Currencies Latest Daily YTD pct pct change change Brazil real 3.1560 -0.14 2.87 Mexico peso 18.8550 -0.49 9.11 Chile peso 669.2 -0.15 0.22 Colombia peso 2,928 0.38 2.51 Peru sol 3.25 -0.06 5.05 Argentina peso (interbank) 15.28 0.16 3.89 Argentina peso (parallel) 15.84 0.82 6.19 (Reporting by Bruno Federowski and Mitra Taj; Editing by Tom Brown and Jonathan Oatis)