By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- After trading in a tight range for
most of the session, U.S. stocks moved decidedly lower following
the Federal Reserve's decision to end the last leg of it its
bond-buying program.
While the end of QE was widely anticipated, investors were
surprised with the Fed's upbeat view on the labor market. For the
first time, the Fed explicitly said it could raise interest rates
sooner than markets expects if the economy grows faster than the
bank projects. The Fed's view implies the U.S. economy is on firm
footing but the market's had hoped for more signs that a low-rate
policy would be maintained for an extended period.
The S&P 500 dipped lower (SPX), with most of the benchmark's
components trading lower. The Nasdaq Composite Index, which was
already under pressure from Internet stocks (RIXF) sank further.
Meanwhile, the Dow industrials (DJI) made a sharp move south.
In the wake of the Fed announcement, 10-year Treasury note yield
extended gains, up 5 basis points to 2.35%. The dollar strengthened
against the Japanese yen to Yen108.8, while gold futures dropped
about 1%.
Tech stocks under pressure: Tech stocks were not shaping up for
a repeat of Tuesday's gains. In large part, Facebook is to blame.
The social-media giant issued a warning about increased expenses,
which overshadowed better-than-expected earnings. Although results
in the past year have been impressive and hard to beat, tougher
comparisons and higher spending are on investors' minds, said
Pacific Crest Securities' analyst Evan Wilson, in a note.
Facebook's stock selloff weighing on tech-sector tracker
Facebook Inc. joins Twitter Inc. (TWTR) in dealing with what's
been a tough week for some Internet stocks. Twitter fell nearly 10%
on Tuesday after the social-media company's results showed slowing
growth in new users and analysts downgraded the stock. Read:
Facebook user growth may be slowing too
More stocks to watch: Hershey Co.(HSY)(HSY) shares fell as the
chocolate maker missed profit expectations and cut its outlook.
WellPoint Inc.(WLP) shares rose after it posted adjusted
earnings that beat forecasts.
Goodyear Tire & Rubber Co.(GT) stock rallied after the tire
maker reported third-quarter profit that was well above
expectations.
U.S. Steel Corp. (X) shares jumped after posting a
narrower-than-expected loss and higher revenue late Tuesday.
InvenSense Inc.(INVN) shares slid after the
micro-electro-mechnical systems designer posted second-quarter
results that fell short of market expectations. Pacific Crest
downgraded shares to sector perform from underperform.
Orbital Sciences(ORB) slumped after one of the company's rockets
exploded soon after lift off. On Sunday, Orbital announced it was
launching an Antares rocket with a Cygnus logistics spacecraft to
the International Space Station. Here's the dramatic footage.
Electronic Arts Inc.(EA) rallied after second-quarter results
topped Wall Street forecasts and the video-game publisher raised
its outlook. See Movers & Shakers for more on individual
stocks.
Other markets: European stocks rose slightly, while Asian
markets took a cue from Wall Street's strong gains on Tuesday and
powered ahead. Gold(GCZ4) inched down while the dollar(DXY) was
steady. Oil(CLZ4) logged moderate gains.
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