NEW YORK (AP) ¿ Investors were encouraged by the Fed's latest improved assessment of the U.S. economy, but not enough to propel the Dow Jones industrial average past 10,000.
Stocks closed lower Wednesday as a brief rally followed the Fed's economic statement and then faded. The Dow came within 82 points of crossing 10,000 for the first time since October, but ended the day with a loss of 81.
Stocks often trade erratically on days when the Fed meets to discuss interest rates as investors pore over the statement accompany the Fed's interest rate decision for clues about the economy and what the central bank's next steps might be.The Fed's governors said the pace of economic activity has "picked up" since their last meeting in August, and said they would keep short-term interest rates at historically low levels near zero "for an extended period." That allayed any lingering concerns that the Fed was considering a rate increase, something it will have to do eventually in order to keep inflation in check. Higher interest rates would protect against prices creeping higher, but it would also mean greater borrowing costs for banks and businesses, a negative for both stocks and bonds.