US stocks down

US stocks edged lower on Wednesday after the Federal Reserve acted to aid the fragile economy with stimulus measures that were in line with market expectations but went no further. Stocks rallied in recent days in the hope that the US central bank would extend Operation Twist, a bond-buying program designed to lower long-term rates and stimulate growth. However, investor hopes of additional Fed action went unfulfilled.
--- Procter & Gamble slips, cites weak demand overseas
In addition, the Fed slashed its economic projections for this year and cut forecasts for the next two years as well. Taken together, it left some investors wondering why the Fed did not signal a third round of quantitative easing. "The short-term selloff is instigated by temporary frustration that QE3 is not in the immediate future," said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey. "In light of the Fed's forecasts, which are somewhat more disappointing, one would consider that the Federal Reserve would be much more aggressive on that front."
Concerns about weakened demand were highlighted by Dow component Procter & Gamble, which cut growth forecasts early on Wednesday. Shares of the world's largest household product maker fell 2.9 percent to $60.39. Another disappointing outlook came from Bed Bath & Beyond Inc, which projected a weaker-than-expected profit for the current quarter after the market closed. Shares of the home goods chain fell 10 percent to $66.25 in extended trading.
Trading was volatile after the Fed announcement about midday. Declines picked up during Fed Chairman Ben Bernanke's afternoon news conference but then were mostly erased. The Nasdaq composite index even ended slightly higher. The Dow Jones industrial average was down 12.94 points, or 0.10 percent, at 12,824.39. The Standard & Poor's 500 Index was down 2.29 points, or 0.17 percent, at 1,355.69. The Nasdaq Composite Index was up 0.69 point, or 0.02 percent, at 2,930.45.
The Fed said it will extend until the end of 2012 Operation Twist, a stimulative program aimed at lowering long-term interest rates by swapping $267 billion in US Treasury securities. The program had been scheduled to end this month. The benchmark S&P 500 index had risen for four days in a row and accumulated gains of about 7 percent from a five-month low hit earlier in June as many investors anticipated some Fed action to aid the flagging recovery.
While the Fed is "willing to take action if needed, they're not giving enough detail as the market wants. There's a disconnect between what markets want and what the Fed is willing to commit to," said Alec Young, global equity strategist at S&P Equity Research in New York.
Tech stocks were the day's biggest gainers, rising 0.2 percent. Jabil Circuit Inc led the sector as expectations rose that it had retained a key mobile phone customer, sending shares 6.8 percent higher to $20.75. Wall Street continued to keep a close watch on Europe for any development out of the region with respect to its sovereign debt issues.
German Chancellor Angela Merkel said that both of Europe's bailout funds included mechanisms for buying state debt on the secondary bond market but stressed that this was a "purely theoretical" question and was not being discussed. Adobe Systems slid 3 percent to $31.99 after the maker of Photoshop and Acrobat software cut its full-year revenue outlook and warned about weak demand in Europe.
About the same number of stocks traded on the New York Stock Exchanged rose as fell on Wednesday while slightly more stocks fell on the Nasdaq than rose. Volume was light, with about 6.57 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion.