Wall Street cuts gains after Fed statement

Fed keeps rates unchanged but keeps Dec rate hike option open

US stocks were up slightly on Wednesday afternoon but sharply off earlier gains after the Federal Reserve kept interest rates unchanged but left the door open to tightening monetary policy at its next meeting in December.

The central bank downplayed global economic headwinds in its statement, but said it was still monitoring economic and financial developments abroad.

Stocks briefly traded in negative territory after the statement. Interest-rate sensitive utilities, down 1.8%, led S&P sector declines.

"We knew they weren't raising but they had to move away from dovish statement that focussed on China and Asia last time and grease the skids for a December increase. We see a more hawkish statement than we saw six weeks ago," said Paul Schatz, president and chief investment officer at Heritage Capital in Woodbridge, Connecticut.

The Fed hasn't hiked rates in about a decade.

The Dow Jones industrial average rose 9.88 points, or 0.06%, to 17,591.31, the S&P 500 gained 2.15 points, or 0.1%, to 2,068.04 and the Nasdaq Composite added 1.55 points, or 0.03%, to 5,031.69.

Gains in Apple's shares , up 2.7% at $117.60, helped to support indexes, a day after its reported stronger-than-expected results.

Advancing issues outnumbered declining ones on the NYSE by 1,986 to 1,036, for a 1.92-to-1 ratio on the upside; on the Nasdaq, 1,995 issues rose and 818 fell for a 2.44-to-1 ratio favouring advancers.

The S&P 500 posted 30 new 52-week highs and 6 new lows; the Nasdaq recorded 117 new highs and 71 new lows.