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Wall Street falls after Fed statement, energy shares tumble

Reuters  |  NEW YORK 

By Sinead Carew

(Reuters) - The 500 and closed slightly lower on Thursday after a Federal Reserve statement, and were the biggest drag on the as U.S. fell.

said after its two-day meeting that strong job gains and household spending were keeping the on track but business investment "moderated from its rapid pace earlier in the year," creating a possible drag on future economic growth.

Aside from the comment about business investments, the Fed statement was largely as expected and suggested to investors that the Fed's next rate hike would be in December. But some investors had hoped for a change in tone after October's market sell-off.

"The Fed has recognised that there is one part of the that is slowing a little bit, but it is not deterring them from their 'gradual increase' language. Not yet anyway," said Jamie Cox, at Harris Financial Group, Richmond,

"There is really nothing to point to what the market had hoped, that there would be a more dovish stance. So I think this is more of what we call a hawkish hold."

The <.DJI> rose 10.92 points, or 0.04 percent, to 26,191.22, the 500 <.SPX> lost 7.06 points, or 0.25 percent, to 2,806.83 and the Composite <.IXIC> dropped 39.87 points, or 0.53 percent, to 7,530.89.

The three indexes had all risen 2 percent in the previous day's session due to a relief rally once the U.S. midterm were in the rearview mirror.

Quincy Krosby, at in Newark, said companies were holding off on spending because of uncertainty over a U.S.-trade war.

"A slowdown in business spending can slow the underpinning of the stock market," Krosby said. "Is the Fed data-dependent or is it maintaining a rigid schedule for rate hikes in 2019? What would cause the Fed to pause? It's clear from this statement today that they're looking at anything that could potentially slow the "

The index <.SPXBK> ended the day with a 0.4 percent gain as yields rose because profits benefit from rising rates.

were the S&P's biggest drag with a 2.2 percent drop as U.S. confirmed a bear market, falling more than 20 percent from their Oct. 3 high as investors focused on swelling global crude supply, which is increasing more quickly than many had expected. [O/R]

reported that Saudi Arabia's top government-funded think-tank is studying the possible effects on of a breakup of OPEC in a story citing unnamed people familiar with the matter.

Declining issues outnumbered advancing ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favoured decliners.

The posted 33 new 52-week highs and 4 new lows; the Composite recorded 76 new highs and 81 new lows.

On U.S. exchanges 7.23 billion shares changed hands compared with the 8.43 billion average for the last 20 sessions.

(Additional reporting by Richard Leong, April Joyner, Caroline Valetkevitch, and in and in Bengaluru; Editing by Chizu Nomiyama, and Susan Thomas)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 09 2018. 02:57 IST