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Stocks End Mixed as Fed Holds

The Dow Jones Industrial Average stumbled on Wednesday but other stock-market gauges rose after the Federal Reserve held its ground on interest rates and its Treasury-purchase plans.

The Federal Open Market Committee said it had voted 10-0 to maintain the target federal-funds rate for interbank lending at a record-low range of zero to 0.25%. Policy makers reiterated that they're likely to keep rates at low levels for an extended period.

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The Dow industrials slipped 23.05 points, or 0.3%, at 8299.86. It was pressured by a 5.8% decline in Boeing, which continued to fall after postponing the first flight of its Dreamliner aircraft Tuesday, and a 2% slide in American Express.

Though Fed policy makers highlighted fresh signs of economic stability, the central bank also said the economy is "likely to remain weak for a time." The rate-setting committee added that consumer spending remains constrained and businesses continue to cut staff and investment.

Policy makers reiterated their plans to purchase up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. They plan to buy up to $300 billion of Treasurys by autumn.

Treasury prices fell, pushing yields higher. The benchmark 10-year note slid 20/32 to yield 3.701%. The 30-year bond, which is a key factor in the mortgage market, declined 1-14/32 to yield 4.447%.

Some analysts were disappointed that the Fed didn't boost its Treasury purchases to keep rates low and help spur an economic recovery. Ajay Rajadhyaksha, head of U.S. fixed income and securitization strategy at Barclays Capital, said that interest rates are likely to rise if the Fed doesn't increase its purchases.

Despite the losses for blue chips, other stock benchmarks moved higher. The broad S&P 500-stock index advanced 5.84 points, or 0.7%, to 900.94. The Nasdaq Composite Index rose rose 27.42 points, or 1.6%, to 1792.34 as Oracle shares climbed 7% after it provided a better-than-expected earnings outlook.

Ned Riley, chief executive of Riley Asset Management in Boston, said he expects to see more developments like Oracle's better-than-expected quarterly report in the months ahead as businesses gradually ramp up their spending on computers and other equipment during the early stages of a global economic recovery.

"We've basically come through a panic phase," in which companies cut all spending on technology no matter how badly their employees might have needed it, said Mr. Riley. "Now they're ramping back up a little, but we still have a way to go before it's back to normal."