NEW YORK (TheStreet) -- Stocks closed near session lows on Wednesday after Federal Reserve policymakers said U.S. unemployment remains "elevated" and that "fiscal policy is restraining economic growth," adding that they are prepared to increase or reduce asset purchases as needed.
The S&P 500 dropped 0.93% to 1,582.70. The Dow Jones Industrial Average lost 0.94% to 14,700.95, while the Nasdaq slid 0.89% to 3,299.13.
"The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes."
The FOMC indicated it will continue its bond purchasing program, buying mortgage-backed securities at a pace of $40 billion per month in addition to longer-term Treasury securities at a pace of $45 billion a month. The Fed committee affirmed its target federal funds rate at 0% to 0.25%, noting that inflation has been running somewhat below the Committee's longer-run objective while longer-term inflation expectations have remained stable. The Committee anticipated that inflation over the medium term likely will run at or below its 2% objective.The European Central Bank's rate announcement is scheduled for Thursday. Most economists in a Thomson Reuters poll are expecting a cut of 25 basis points to a new record low of 0.5%. The latest employment numbers pointed to a slowdown in the economy with payroll processor ADP reporting that the private sector added 119,000 jobs in April vs. a downwardly-revised 131,000 in March. The number was below the consensus estimate of 150,000, according to Thomson Reuters. Similarly, the ISM Manufacturing Index dipped to 50.7 in April from 51.3 in March, falling further than the 50.9 economists, on average, were expecting, according to Thomson Reuters. The construction spending number for March was also a disappointment, falling 1.7%, compared with forecasts for a 0.7% rise, and following an upwardly-revised increase of 1.5%. As the biggest decliner in the S&P, Allergan (AGN) plunged 13.1% after the company known for its Botox cosmetic treatment said that it would postpone two of its drug studies. ADT Corp. (ADT) slumped 6.9% to $40.64 after the home-security provider posted second-quarter earnings of 41 cents a share on revenue of $821 million, falling short of the average analyst earnings expectation of 43 cents a share on revenue of $823.48 million as non-recurring revenues declined 25.3%. "The company's mix of newly installed systems continues to shift toward more ADT-owned systems, increasing deferred revenue and reducing current period installation revenue," ADT said in a statement. Merck (MRK) slid 2.8% to $45.69 after posting first-quarter revenue below estimates, as results took a hit from a stronger dollar that hurt sales abroad and generic competition for its Singulair asthma drug. Humana (HUM) popped 4.7% to $77.56 after the insurer raised its full-year earnings outlook to between $8.40 and $8.60 a share after reporting first-quarter earnings that beat analysts expectations and improved by 91% as Medicare Advantage enrollment and sales increased. NBCUniversal parent Comcast (CMCSA) rose 1.4% to $41.86 after reporting first-quarter earnings of 51 cents a share, beating estimates by a penny, and revenue that was a touch below expectations as a double-digit decline in broadcast sales was offset by strength in cable and theme parks. Follow @atwtse Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.
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