MARKET SNAPSHOT: U.S. Stocks Fall After Fed Decision

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks declined modestly on Wednesday after the Federal Reserve announced it would trim the bond purchases by another $10 billion this month and changed the way it targets unemployment and inflation in deciding short-term interest rates.

The Fed said it will now consider a "wide range" of factors instead of relying mainly on the unemployment rate. The Fed statement also stressed that the bank could keep short-term rates below what is viewed as "normal" even if employment levels and inflation hit its targets.

The S&P 500 (SPX) fell 3 points, or 0.2%, to 1,869.25 after the announcement. The Dow Jones Industrial Average (DJI) dropped 32 points, or 0.2%, to 16,300.45.

The Nasdaq Composite (RIXF) shed 9 points, or 0.2%, to 4,324.29.

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"The market didn't like what it heard from the Fed. I'm guessing that it's the continuation of the taper -- even as the weather we've had the past few months has clearly slowed the economy," said Kimberly Caughey Forrest, senior equity analyst and vice-president, Fort Pitt Capital Group.

Fed Chairwoman Yellen is holding her first news conference as new Chairwoman at the end of the deliberations at 2:30 p.m. Eastern. See also: Live blog and video of the Fed decision and the Janet Yellen press conference.

Yields on 10-year Treasurys jumped, gold prices fell further and the dollar spiked against the Yen after the Fed announcement.

Earlier, a batch of mixed earnings did little to influence cautious sentiment.

Among individual stocks, shares in KB Home (KBH) jumped 8.8% after the home maker swung to profit in its fiscal first quarter, beating analysts estimates.

Shares of Oracle Corp. (ORCL) fell 1.3% after the business-software group's adjusted profit and revenue growth wasn't as strong as analysts had forecast.

FedEx Corp. (FDX) was little changed following the release of its fiscal third-quarter earnings that fell short of Wall Street's expectations. FedEx Corp. said severe winter weather dragged down its earnings for the quarter ended Feb. 28.

General Mills Inc. (GIS) shares were 1.2% higher after the food company reported quarterly profit mostly in line with expectations.

In overseas markets, Asia had a mixed day, with the Nikkei 225 giving up a more than 1.2% gain at one point to close up just 0.4%, while Chinese stocks went nowhere. European markets slipped, while the FTSE 100 index rose after the release of minutes from the latest Bank of England Monetary Policy meeting and the latest jobs data. (GBPUSD)

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