Business Highlights

Fed sees hopeful signs but downgrades '09 forecast

WASHINGTON (AP) — The Federal Reserve expects the economy to improve in coming months, even as policymakers downgraded their outlook for all of 2009 and said the unemployment rate could approach 10 percent.

Fed Chairman Ben Bernanke and his colleagues continue to believe that business sales and factory production will begin to recover gradually during the second half of this year as President Barack Obama's stimulus package and the Fed's aggressive efforts to lift the country out of recession take hold. They also pointed to signs that the recession's grip was easing in the current quarter, according to documents released Wednesday.

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Stocks close lower after Fed reduces 2009 outlook

NEW YORK (AP) — Stocks gave up a big early advance to finish moderately lower Wednesday after the Federal Reserve reduced its economic outlook for 2009 and bank stocks fell.

Stocks had been fluctuating throughout much of the afternoon Wednesday as rising commodity prices drove energy and material stocks higher, while bank stocks gave up early gains.