NEW YORK (
) -- Major U.S. stock averages reversed gains in the final hour of trades on Wednesday as
Chairman Ben Bernanke answered reporters' questions.
The drop came despite an earlier spike in the major indices after the central bank fulfilled the wishes of the markets
for a fresh round of stimulus.
After the two-day meeting of the Federal Open Market Committee -- the
rate-setting arm -- policy makers announced they will replace Operation Twist, which expires at the end of the year, with the purchase of longer-term Treasury securities initially at a pace of $45 billion a month. This would be in addition to its ongoing purchases of additional agency mortgage-backed securities at a pace of $40 billion a month.
Also, policymakers decided to keep the target range for the federal funds rate at an exceptionally low zero to 0.25% as long as the jobless rate remains above 6.5%, inflation expectations for the next one to two years stay subdued and longer-term inflation projections continue to be tame.
Prior to the announcement, major equity averages were trimming gains in late morning trading amid signs of discord in the U.S. fiscal cliff negotiations.
House Speaker John Boehner on Wednesday criticized President Barack Obama's most recent budget plans as unbalanced and focusing too much on tax rate hikes, according to
The Wall Street Journal.
"His plan does not fulfill his promise to bring a balanced approach to solving this problem -- it's mainly tax hikes," said Boehner, according to the
. "His plan does not begin to solve our debt crisis, it actually increases spending."
Obama indicated Tuesday evening that he's optimistic a deal will be reached with congressional Republicans.
Obama has softened his stance on tax increases, lowering his counteroffer in tax revenue to $1.4 trillion over a decade from $1.6 trillion.
Dow Jones Industrial Average
rose 3 points, or 0.02%, to 13,245.
Breadth was positive, with winners outpacing losers 17 to 13. The top percentage blue-chip gainers were
DuPont shares closed up 1.4% after the chemical company announced a $1 billion share buyback plan and boosted its full-year profit guidance to the high end of the previously estimated range.
shares advanced 0.29%, as the company plans to increase the availability of the new Surface tablet at stores and to extend the operation of temporary retail stores for the holiday shopping season.
shares were up 0.15%.
is in talks with Intel and
buy out their stakes
, the U.S. wireless provider,
reported, citing two people familiar with the matter.
Sprint shares gained 1.6%. Comcast shares added 0.05%.
Clearwire shares popped 2.6%.
was up less than 1 point, or 0.04%, at 1,428. The
gained 8 points, or 0.28%, at 3,014.
All sectors in the broad market were in the green, spearheaded by gains in consumer cyclicals, financials, conglomerates and energy.
Volumes were rising above 3.69 billion shares on the
New York Stock Exchange
and 1.75 billion on the Nasdaq. Decliners edged advancers by a ratio of 1.1-to-1 on the Big Board and 1.5-to-1 on the Nasdaq.
"In short, the Fed is aggressively trying to add to the economy's strength, but its accommodation has become more clearly conditional," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics. "The impact of asset buying is debatable, but over time the effects are significant, in our view."
"The Fed's statement is something of a surprise in terms of announcing thresholds for tightening policy although it did, as expected, add to its bond buying plan to coincide with the end of its maturity extension program," said Andrew Wilkinson, chief economist strategist at Miller Tabak. "Of special interest will be how hard the Fed keeps its foot on the bond-buying pedal as it approaches its unemployment target, which at the last count remain still two years away."
The Bureau of Labor Statistics said Wednesday that import prices for the U.S. declined by 0.9% in November, falling for the first time in fourth months as crude oil prices fell.
The FTSE 100 in London settled up 0.35% and the DAX in Germany closed up 0.33%. Greek debt buyback efforts appeared to have progressed, potentially helping to push the country closer to receiving its next tranche of financial aid.
Japan's Nikkei average closed up 0.59% on Wednesday and Hong Kong's Hang Seng index closed up by 0.8%.
Gold for February delivery rose $8.30 to settle at $1,717.90 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts rose 96 cents at $86.75 a barrel.
The benchmark 10-year Treasury plummeted 14/32 to push the yield up to 1.707%. The dollar was down 0.20%, according to the
U.S. dollar index
In other corporate news, the owner of Redbox kiosks,
( CSTR )
(VZ - Get Report)
announced a deal to launch a movie streaming service very soon, increasing competition for
Still, Netflix shares were shrugging off the news, jumping nearly 6% as Morgan Stanley increased its price target on the stock to $105 from $80.
Coinstar shares popped 2.3% and Verizon shares increased 0.79%.
announced Wednesday that it purchased 9,200 Class A shares at $131,000 a share from the estate of a long-time shareholder. Shares popped 2.4%.
, the rare-earth mining company, said Tuesday its president and CEO, Mark Smith,
Shares were off 3%.
on the Nasdaq-100 on Wednesday.
Shares of the social networking company were down more than 1.4%.
posted fiscal fourth-quarter adjusted earnings of $2.05 a share on revenue of $1.6 billion; analysts were expecting earnings of $1.91 a share on revenue of $1.42 billion. Joy Global said it expected lower volumes for 2013.
Shares closed higher by 4%.
-- Written by Andrea Tse and Joe Deaux in New York.
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