NEW YORK (AP) — Stocks are falling after the Federal Reserve gave a slightly more optimistic outlook for the U.S. economy, which investors took as a hint that the bank was nearer to a decision to reduce its economic stimulus program.
The Dow Jones industrial average was down 70 points to 15,249 points at 2:30 p.m. Eastern Daylight Time, half an hour after the Fed released its policy statement and economic outlook. The Dow was down 16 points shortly before the announcement.
The Standard & Poor's 500 index was down five points, 0.3 percent, to 1,645.
The yield on the 10-year Treasury note rose to 2.27 percent from 2.21 percent as traders sold the bonds.
The Fed has been buying $85 billion of bonds a month to support an economy that is still struggling to grow faster following the Great Recession. For weeks investors have been trying to figure out when the central bank will start to ease back on those purchases.
The Fed has said it will keep up the purchases until the outlook for the job market improves substantially, but it's still not clear yet to many investors what benchmarks the Fed will use to determine when that happens.
On Wednesday the Fed said it would continue with the bond purchases and keep interest rates at record lows. In a statement released after a two-day policy meeting, the Fed said the economy was growing moderately.
"The Fed right now is really trying to walk a tightrope," George Rusnak, head of fixed income at Wells Fargo Private Bank, said shortly after the Fed's statement was released. "They're preparing the market for tapering but at the same time they are trying to comfort the markets that it won't be too dramatic or too quick."
The Fed's policy of low interest rates coupled with bond-buying has been a major factor in driving stocks higher from their lows during the Great Recession. The S&P 500 has gained 15.7 percent this year and has advanced more than 140 percent since bottoming out in March 2009.
The stock market started this week on a strong note. The Dow rose more than 100 points both Monday and Tuesday. While reports of increased home building and low inflation propelled some of the gains, some investors said the buying was driven by expectations that Bernanke would ease investor concerns that the Fed is poised to turn off its stimulus.
In commodities trading, the price of crude oil fell 15 cents, or 0.2 percent, to $98.51 a barrel. The price of gold rose $7.10, or 0.5 percent, to $1,374 an ounce. The dollar edged lower against the euro and the Japanese yen.
In other U.S. stock trading, the Nasdaq composite fell 10 points, or 0.2 percent, to 3,471.
Among stocks making big moves:
— Sprint Nextel fell 23 cents, or 3.1 percent, to $7.09 after satellite TV operator Dish Network said late Tuesday that it wouldn't submit a revised bid for the wireless carrier.
— Adobe jumped $2.83, or 6.5 percent, to $46.19 after the software maker said that its Creative Cloud subscriptions continued to climb in its fiscal second quarter.
— FedEx gained $2.49, or 2.5 percent, to $101.90 after the company posted earnings that beat the expectations of Wall Street analysts.
— Men's Wearhouse fell 60 cents, or 1.6 percent, to $35.20 after the company dismissed its founder and executive chairman George Zimmer. The company also delayed its annual shareholders' meeting, which had been scheduled for Wednesday.