U.S. stocks ended the day slightly lower Wednesday after the Federal Reserve’s policy-making committee announced the end of its bond-buying program, known as quantitative easing.
The move was widely expected, as was the Federal Open Market Committee’s pledge to leave interest rates low for a “considerable amount of time.”
Still, stocks, which had opened higher, fell on the news.
“The markets normally have a knee-jerk reaction,” said Paul Nolte, an analyst at Kingsview Asset Management, referring to the drop in stock prices. “Tomorrow there will be a reversal of that.”
The Dow Jones Industrial Average dipped 31.44 points, or 0.18 percent to close at 16,974.31. The Standard & Poor 500 Index slipped 2.75 points, or 0.14 percent, to close at 1,982.30. The Nasdaq Composite Index retreated 15.07 points, or 0.33 percent, to close at 4,549.23.
The bond market fell, sending the yield on the benchmark 10-year Treasury note to 2.32 percent, up from Tuesday’s close of 2.297 percent, as investors focused on the Fed’s upbeat assessment of the labor market.
“Labor market conditions improved somewhat further, with solid job gains and a lower unemployment rate,” the FOMC said in its statement.
Signs of economic strength can be seen in corporate earnings reports. According to Bloomberg data, nearly 70 percent of companies representing the S&P 500 index reported third quarter earnings that met or exceeded expectations.
Goodyear Tire & Rubber Co. rose 5.1 percent, also, after reporting better third-quarter earnings than analysts expected.
Electronic Arts Inc. shares rallied 3.8 percent after forecasting higher adjusted earnings for fiscal 2015.
Wednesday’s losers included Owens-Illinois, Inc. The company’s shares plummeted 9.43 percent, after a Jefferies analyst downgraded it from “buy” to “hold.”
Facebook Inc.’s shares dropped 6.08 percent, reflecting softer-than-expected results from an acquisition of mobile-messaging application, WhatsApp Inc., which posted a net loss of $138.1 million in 2013.
Garmin Ltd. shares fell 5.66 percent, after it raised its forecast for third quarter and annual adjusted earnings.