U.S. stocks erased an earlier gains after the Federal Reserve didnt indicate when it will reduce the pace of stimulus. Data issued yesterday showed the economy grew more than projected in the second quarter.
The S&P 500 lost less than 1 point to 1,685.73 at 4 p.m. in New York. The benchmark gauge gained 5% for July, the biggest monthly advance since January. The Dow Jones Industrial Average dropped 21.05 points, or 0.1% to 15,499.54. About 7 billion shares changed hands on U.S. exchanges, 10 percent above the three-month average.
“The statement should come as no surprise, the Fed will remain largely data dependent as to asset purchases, while noting persistently low inflation may be a risk to the economy,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in an interview for Bloomberg. “The mention of low inflation being a risk may push out expectations for tapering, but by and large, this statement reads as expected.”
As expected, the Fed said in its statement that it would keep up its stimulus efforts. Officials pointed to modest growth, higher mortgage rates and low inflation as factors in its decision.
Earlier, data compiled by Automatic Data Processing and Moodys Analytics pointed that 200,000 private-sector jobs were added in July, above expectations of 183,000. June jobs growth was revised up to 198,000 from 188,000.
In corporate news, Dell fell 1.6%, to $12.66, after a special board committee rejected a request from founder Michael Dell and private-equity firm Silver Lake to change voting rules on their buyout offer in exchange for a 10-cent price boost.
Air Products & Chemicals added 2.9%, to 108.64, after investor William Ackman of Pershing Square Capital Management took a 9.8% stake in the firm, which supplies hydrogen and semiconductor materials.
Symantec surged 9.6%, to 26.68, after the security-software maker reported fiscal first-quarter earnings and revenue that exceeded analyst estimates and affirmed its full-year outlook.
Visa retreated 7.5% to $177.01 for the second-largest drop in the S&P 500. The world’s biggest payment network declined after a judge ruled that the Fed was inflating the debit-card fees that banks can charge retailers.
MasterCard, the second-biggest U.S. network, gained 1.5% to $610.61. The shares jumped as much as 4.1% earlier in the day after profit beat analysts’ estimates as spending on credit and debit cards rose.
Herbalife Ltd. advanced 9.1% to $65.50 after CNBC reported billionaire investor George Soros has taken a large stake in the nutrition company.
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