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Stocks can't hold gains
Investor nerves may explain why market gave up gains late in the day.
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NEW YORK - A late-day slump left stocks mixed Wednesday as investors couldn't hold on to their optimism after the Federal Reserve gave an encouraging assessment of the economy.
The Dow Jones industrial average, up more than 150 points after the Fed described the economy as showing more signs of recovery, closed up 30. Broader indexes were narrowly mixed.
Analysts couldn't point to any one reason why stocks gave up their gains late Wednesday, although some said the market is nervous as the release of the government's October jobs report on Friday approaches. Financial stocks fell especially hard in the last hour of trading after a House vote to speed up the effective date of limits on credit card companies, and added to the overall market's pullback.
The Fed, as expected, left its benchmark interest rate unchanged at a record low of essentially zero and said the economy is slowly rebounding. Its announcement followed reports earlier in the day on service industries and employment that eased some worries about the economy.
The Fed's statement accompanying its rate decision noted that housing activity has picked up in recent months. It also said consumer spending, while still constrained by unemployment and other problems, appears to be growing.
Policymakers said they would keep interest rates low for an "extended period" and said inflation is likely to remain tame.
Some investors have worried that rising prices would force the Fed to boost interest rates and risk cutting off a nascent recovery in the economy.
But, as often happens after Fed meetings, stocks were unable to hold their gains. The Fed statement, while more upbeat than in recent months, did note there are ongoing job losses.
Meanwhile, the House approved new rules for credit card companies unless lenders agree to freeze interest rates and fees. The vote would move up the February effective date of legislation already passed by Congress that limits what banks can charge for credit cards.
It didn't appear likely the Senate would also pass the measure, but the House vote still sent financial stocks falling.
The Dow rose 30.23, or 0.3 percent, to 9,802.14. It had been up as much as 156 after the Fed announcement.
The broader Standard & Poor's 500 index rose 1.09, or 0.1 percent, to 1,046.50. The Nasdaq composite index fell 1.80, or 0.1 percent, to 2,055.52.
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