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Stocks edge lower after record-setting run

Ken Sweet, AP Markets Writer

In this Wednesday, Sept. 18, 2013, photo, specialist Christopher Culhane works at his post on the floor of the New York Stock Exchange after the Federal Reserve announcement. Global stock markets surged Thursday after the U.S. Federal Reserve unexpectedly refrained from reducing its massive economic stimulus. (AP Photo/Richard Drew)

NEW YORK (AP) -- Worry returned to Wall Street Thursday, a day after stocks surged to record highs following the Federal Reserve's decision to continue its stimulus of the economy.

Stocks and government bond prices edged lower, and gold, a haven for nervous investors, had its biggest one-day jump since the onset of the financial crisis in September 2008.

Investors are now struggling to figure out if the Fed's decision to delay any pullback in stimulus is a signal that the economy is weaker than previously thought.

On Wednesday, the Fed cut its economic growth forecasts for this year and 2014. Chairman Ben Bernanke warned that the upcoming debt ceiling and budget battles between the White House and Congress "may involve additional risks to financial markets and to the broader economy."

"There is still some uncertainty in the marketplace whether the Fed's decision not to pull back was driven by politics or if there are true economic concerns," said Julius Ridgeway, an investment adviser at Medley Brown, a financial-advisory firm in Jackson, Miss.

Ridgeway said Wednesday's market rally underscores a deeper concern: Investors believe the economy can grow only with the Fed's help.

The Standard & Poor's 500 index was down four points, or 0.3 percent, to 1,720 as of 2 p.m. Eastern Daylight Time. The Dow Jones industrial average slipped 42 points, or 0.3 percent, to 15,634 and the Nasdaq composite index was basically unchanged 3,783.

The Fed voted Wednesday to continue its $85 billion-a-month bond-buying program. The decision was a surprise because Bernanke and other voting members of the Fed had telegraphed over the summer that the central bank was considering pulling back. The bond buying is designed to keep interest rates low with the goal of stimulating the economy by encouraging borrowing and lending.

Both the Dow and the S&P 500 hit record highs Wednesday. Investors also made big moves into gold, anticipating that the Fed's decision to pull back, also called "tapering" on Wall Street, may weaken the dollar or cause inflation.

"He basically shelved tapering for the short and medium term," said Frank Davis, director of sales and trading at LEK Securities. Davis said the Fed would likely not vote to start pulling back until its mid-December policy meeting.

The price of gold continued to climb Thursday, surging $64 an ounce, or 4.9 percent, to $1,366 an ounce.

The yield on the 10-year Treasury note rose to 2.75 percent from 2.69 percent late Wednesday.

September, historically a bad month for the market, is on pace to be the best month for stocks in nearly two years. The S&P 500 is up 5 percent so far this month, the index's strongest performance since October 2011.

Investors also had a better-than-expected report on unemployment claims to digest Thursday. The government said the number of people who filed for unemployment benefits rose to 309,000 last week, well below the 326,000 claims economists had expected, according to data from FactSet.

In corporate news:

— ConAgra, whose many brands include Chef Boyardee and Marie Callender's, slumped $1.29, or 4 percent, to $30.78 after the company's income fell short of financial analysts' expectations. The company also cut its outlook for 2014.

—JPMorgan Chase fell 70 cents, or 1.3 percent, to $52.72 after the bank agreed to pay $920 million in fines to U.S. and British regulators related to its London Whale trading loss.

— Rite Aid jumped 71 cents, or 19 percent, to $4.42. The drug store chain said it had an unexpected second-quarter profit. It also raised its profit forecast for fiscal year 2014.

— Agilent Technologies, which makes scientific instruments, rose $2.23, or 4.5 percent, to $51.56 after announcing a spinoff of its electronic measurement business.