US stocks declined after Fed assessment of economy conditions

US stock indexes sank pushing Standard and Poors 500 Index to record its first drop in more than a week, as investors and analysts were expecting the Fed to downgrade its economic outlook due to budget dispute in Washington earlier this month that caused a government shutdown.

The S&P 500 index fell 8.64 points, or 0.5%, to 1763.31. The Dow Jones Industrial Average declined 61.59 points, or 0.4%, to 15618.76, with 25 of 30 components lower. On Tuesday, the Dow rose 111 points to beat out the previous record high from September. The Nasdaq Composite Index was down 21.72 points, or 0.5%, to 3930.62.

“The Fed didnt seem to see the government shutdown and fiscal retrenchment as a big concern for the economy,” said for The Wall Street Journal, Jason Evans, co-founder of hedge fund NineAlpha Capital LP in New York. “If the Fed is right about the underlying strength of the U.S. economy, the taper timing could be earlier than many people expected. A December taper is not completely out of the question. But the bar is high.”

As the Fed didnt mention slowdown from the partial government shutdown earlier this month, data hasnt indicated that growth is picking up. Labor market, which Fed officials have said will play a key factor in policy decisions hasnt been as strong as expected. On Wednesday, private-sector payrolls reported by Automatic Data Processing fell 2.69% and the consumer-price index indicated that inflation wasnt picking up.

In corporate news, General Motors shares rose 3.24% after reporting profit that exceeded analyst estimates, as company continues to show strength in North America and an improved performance in Europe.

Social-media giant Facebook surged in after-hours trading after its latest quarterly earnings, issued after the markets close, easily beat investors forecasts.

U.S. Steel Corp. sank 2.9% to $24.72. The US largest producer of the metal will permanently close parts of two plants due to cutting costs after experiencing four unprofitable quarters. The company was downgraded to “hold” from “buy” at Deutsche Bank.

Electronic Arts Inc. added 7.8% to $26 for the biggest gain in the S&P 500. The second-largest U.S. video-game publisher was raised to “strong buy” from “hold” by Needham & Co.