NEW YORK REPORT
THE Dow fell for the fourth day and other indexes ended well off the day’s highs yesterday after the Federal Reserve reiterated concerns about the economic outlook at the end of its policy meeting.
Technology shares sustained some strength, bolstered by stronger-than-expected quarterly results from software maker Oracle.
The Fed, as expected, left the benchmark fed funds rate at almost zero, and said it would continue its programme of purchasing US government bonds and mortgage-related debt.
Stocks pulled back after the Fed did not suggest that it sees any notable recovery any time soon.
“The Fed is a little more downbeat than the market has been… that they’re emphasising the weakness is a touch disappointing to me and to the markets,” said Jim Awad, managing director at Zephyr Management.
Before the release of the Fed’s statement, all three major stock indexes were solidly higher, with the Nasdaq up more than two per cent. Investors were encouraged by a stronger-than-expected report on monthly durable goods orders, pointing to increased demand.
The Fed’s words on the economic outlook were mixed. It said the economy was likely to remain weak for a time, but the contraction’s pace was slowing.