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Oil fell from its highest level in a week as U.S. lawmakers agreed on measures to prevent automatic spending cuts and tax increases known as a financial cliff, which threaten to limit economic growth and the demand for fuel.
"People use the meeting as an opportunity to take profits," said Jeremy Friesen, commodity strategist at Societe Generale SA in Hong Kong. "There is nothing new in what the Fed does. It should be aggressive, but can not overcome the financial cliff."
Market News
WallStreet ends nearly flat as Bernanke warns of "Cliff"
Stocks ended almost flat on Wednesday, giving most of the profits a day after Federal Reserve Chairman Ben Bernanke reiterated that monetary policy will not be enough to offset the damage caused by "financial cliff".
His comments followed the announcement of the Federal Reserve's new stimulus plan, which briefly pushed the S & P 500 for seven-week high.
In this regard, the latest attempt to improve the country's struggling economy, will replace the more modest program expires with the new round of Treasury purchases, which will increase its balance sheet. Theprogram known as "quantitative easing" or QE.
In comments after the announcement, Bernanke said that he hopes that the markets do not have the tank to get financial transactions rock.
"Initially, the addition of QE, of course, is favorable. I think that, while the press conference, what happened is that there still seems to be a level of uncertainty with regard to exit strategies (and) the effectiveness of the current policy, "said Bucky Hellwig, senior vice president of asset management at BB & T Birmingham, Alabama.
Bernanke "confirmed the fact that monetary policy has its hands tied as far as resolving serious financial transition rock," added Hellwig.
S & P index of financial sector, which was more than 1 percent after the Fed, were just 0.5 percent.
Shares of Wal-Mart Stores Inc, was the biggest drag on Dow, falling 2.8 percent to $ 68.94 after the announcement of the Indian government to investigate the lobbying firm practice.
Index Dow Jones Industrial Average slipped 2.99 points, or 0.02 percent, to 13,245.45 at the close. 500 Standard & Poor's Indexinched to just 0.64 points, or 0.04 percent, to 1,428.48. But the Nasdaq Composite Index shed 8.49 points, or 0.28 percent, to end at 3,013.81.
Although the S & P 500 was only a little, it was the sixth day of gains for the index - its longest winning streak since August.
The central bank is obliged to purchase a monthly $ 45 billion in Treasury bonds on top of the $ 40 billion a month in mortgage-backed bonds, she began to buy in September. He also said that it would keep its near-zero interest rate program InPlace, while the U.S. unemployment rate dropped to 6.5 percent from the current 7.7 percent.
"The Fed was more aggressive than investors expected," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
"Asset-purchase program is likely to be larger and more comprehensive than some might think."
Talks about plans to avoid financial cliff intensified in Washington, the U.S. House of Representatives Speaker John Boehner said Wednesday that "serious differences" still with President Barack Obama in their negotiations. If no agreement is reached, the steep tax increases and budget cuts will fall into place early next year.
Shares of Aetna, the third-largest U.S. health insurer, gained 3.2 percent to $ 45.91, a day after the company gave a higher forecast for earnings and revenue growth in 2013.
Volume was about 6.58 billion shares traded on the New York Stock Exchange, Nasdaq and NYSE MKT, compared to the year before the date of closing of the average daily volume 6.52 billion.
Slightly outnumbered decliners on the NYSE advanced by 16 to 15, and on the Nasdaq, about 3 to 2. Reuters.com
Currencies
Wide soft dollar after the Fed, the yen continued losses
Dollar on the defensive on Thursday after the U.S. Federal Reserve announced fresh bond purchases program of incentives, but the yen languished at nine-month lows against the U.S. currency on expectations of more money printing in Japan.
The Fed surprised the markets clearly linking his policy path to unemployment and inflation, but there was little immediate impact, as the latest economic forecasts for the Fed offered no change in its earlier promise to keep rates near zero until mid-2015.
"We continue to believe that the Fed is fully implemented, and that the quantitative indicators set a high threshold for further Fed policy output, which is still in the very distant future," said Vassili Serebriakov, strategist at BNP Paribas.
"This means that the Fed is on track to expand its balance sheet substantially in accordance with the regime of weak environment USD".
The dollar index fell to a one-week low at 79.711 after the Fed's decision on Wednesday, and the last was 79.891, flat from late U.S. levels, with a six-week low 79.568 considered as direct support.
As expected, the Fed said it would continue to buy $ 45 billion of government bonds each month after the "Operation Twist" ends this month, in addition to the purchase of $ 40 billion a month in agency mortgage-backed securities.
These links purchase will be financed essentially creating new money, so the $ 2.8 trillion Fed balance sheet is likely to increase by about 40 percent a year.
While the specter of more money printing presses on the dollar as an incentive to help the U.S. economy remains an open question, with some market players expect to reduce the impact of the Fed's quantitative easing again.
"I do not remember, stocks fall on day of announcement of the previous QE. U.S. bonds also fell, although the fact that the Fed will do to improve market'ssupply-demand dynamics," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
"The market response to concerns that the market may become more concerned about the effect of policy direction, which includes the Fed's balance sheet deterioration," he added.
U.S. stocks ended flat, erasing earlier gains, while the long-term bond prices fell from U.S. 30-year bonds hit a five-week high.
As the dollar wilted, euro hit one-week high of $ 1.3098 on Wednesday and the last at $ 1.3067, little changed on the day.
The euro was further supported after former Prime Minister Silvio Berlusconi, who has thrilled people last week abruptly withdrawing support to the government of technocrat Prime Minister Mario Monti, has offered to step aside and suggested Monty could be a candidate center right.
The Australian dollar hit a two-month high of $ 1.0585 on Wednesday and last stood at $ 1.0550, flat on the day, while the British pound also suffered six weeks high of $ 1.6173 before stabilizing at around $ 1.6140.
Ian, however, bucked the trend and fell against the dollar as market participants increased their sales ahead of potentially negative events yen in the coming days.
The dollar rose 0.5 percent to 83.59 percent, edging close to its maximum in March 84.187 yen. The yen also fell to its weakest level in 1 1/2 years against sterling, which brought 134.88 yen.
Bank of Japan Tankan survey is Friday, and probably show sentiment among manufacturers deteriorated in the three months to December, adding, tocalls for more decisive action from the Bank of Japan to stimulate biggesteconomy third in the world.
Meeting of the Bank of Japan will take place after Sunday's election, which looks set to see the opposition Liberal Democratic Party clinched a resounding victory. Abe LDP leaderShinzo pushes BOJ for more powerful monetary stimulus.
One of the reasons for the growth of the dollar / yen was higher U.S. Treasury bond yields, which makes the dollar relatively more attractive against the low-yielding Japanese peers.
"The dollar / yen is moving up for a while now, and you can see the trend continue. He gets moved a fair bit to the U.S. withdrawal and those who moved, despite the fact that the Fed really shows you a bit of positioning in the market," said Joseph Capurso, strategist at Commonwealth Bank.
Elsewhere, the Swiss central bank is expected to keep his cap on the franc at 1.20 francs to the euro on its policy announcement at 0830 GMT. Reuters.com
