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Stocks rally stalls late after Fed statement
By Chuck Mikolajczak
NEW YORK (Reuters) - U.S. stocks mostly eked out a gain on Wednesday, giving back a big slice of the day's advance after the Federal Reserve reiterated its intent to keep rates low, but gave investors few new reasons to boost holdings.
Stocks pushed higher in the hour following the FOMC statement, after the Fed kept its benchmark federal funds rate unchanged in a range of zero to 0.25 percent. The Dow climbed as high as 9,928.04, while the S&P 500 hit an intraday high at 1,061.00 and the Nasdaq touched 2,081.00.
But the market was unable to hold those gains as it succumbed to selling pressure in the last half-hour of trading and the Nasdaq ended slightly lower.
"This doesn't change much. It's hard to figure out how this could be helpful for the upside, though it easily could have been negative," said Jordan Posner, portfolio manager at Matrix Asset Advisors in New York.
"The good news is more an absence of anything bad."
The Fed's closely watched policy statement was somewhat more upbeat than its statement in September. However, it was also more explicit about why it expects to keep rates low, citing "low rates of resource utilization, subdued inflation trends, and stable inflation expectations."
The healthcare sector jumped on hopes the Obama administration's healthcare reforms may be slowed after Republicans scored some key election victories.
The Morgan Stanley Healthcare Payor index <.HMO> jumped 4.7 percent, while the S&P Healthcare index <.GSPA> added 1.3 percent.
The Dow Jones industrial average <.DJI> gained 30.23 points, or 0.31 percent, to end at 9,802.14. The Standard & Poor's 500 Index <.SPX> edged up 1.09 points, or 0.10 percent, to 1,046.50. But the Nasdaq Composite Index <.IXIC> dipped 1.80 points, or 0.09 percent, to close at 2,055.52.
Healthcare stocks also got a lift from Wellcare Health Plans Inc <WCG.N>, which climbed 6.7 percent to $28.09 after the managed care company posted a quarterly profit above analysts' estimates even as membership fell about 8 percent from a year earlier.
Intel Corp <INTC.O> rose 1.3 percent to $18.59 even after it was sued by New York Attorney General Andrew Cuomo, who accused the world's largest chipmaker of threatening computer makers and paying billions of dollars in kickbacks to maintain its market dominance.
Wall Street opened higher after a private-sector report from ADP showed signs of improvement in the labor market. The three major U.S. stock indexes extended gains following a strong reading on the U.S. services sector from the Institute for Supply Management.
(Reporting by Chuck Mikolajczak; Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)
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