US STOCKS-Wall St ends lower after Fed statement

Wed Jan 30, 2013 4:36pm EST
 
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* Fed notes economic pullback, says it's likely temporary

* Facebook increases revenue 40 pct in fourth quarter

* Amazon rallies after results, Boeing also up

* Indexes: Dow off 0.3 pct, S&P off 0.4 pct, Nasdaq off 0.4 pct

By Angela Moon

NEW YORK, Jan 30 (Reuters) - U.S. stocks fell on Wednesday after the Federal Reserve said in its latest statement that economic growth had stalled but indicated the pullback was likely temporary.

Stocks were flat for most of the session prior to the Fed statement at the end of a two-day policy meeting. The Fed repeated its pledge to keep purchasing securities until employment improves substantially.

The statement followed data that showed the economy, as measured by gross domestic product, unexpectedly contracted in the fourth quarter. Economists stressed that the 0.1 percent contraction, caused partly by a plunge in government spending and lower business inventories, is not an indicator of recession.

"The unemployment rate is likely to fall below 6.5 percent next year, so the Fed may be raising interest rates as soon as mid-2014. The fiscal drag from the tax increases will be offset this quarter by rebuilding post-Sandy, so real GDP growth should still come in at 2 percent," said Kurt Karl, chief economist at Swiss Re.   Continued...