NEW YORK — The Federal Reserve didn’t surprise investors but still left them disappointed.
Stocks closed mostly higher Wednesday after the Fed said the economy was on the mend and orders for big-ticket manufactured items posted an unexpected increase. Although the Dow Jones industrials fell modestly, the broader market measures ended the day with gains.
Bond prices fell after the Fed said it wouldn’t step up its spending to purchase Treasurys and other debt to push interest rates lower.
The central bank’s decision to leave its key lending rate at a target of zero to 0.25 percent was anticipated, but some investors have been hoping the central bank would do more to help revive the economy. Others wanted the Fed to more clearly lay out how it will keep inflation in check.
“The Fed is still stuck on that tightrope of trying to make sure they provide enough reassurance to keep the recovery going but at the same time try to allay the concern that they won’t allow inflation to get going either,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
In the economic-assessment statement accompanying its rate decision, the Fed said the economy doesn’t appear to be sliding as quickly as it had been. It noted that consumer spending has shown further signs of stabilizing, although job losses, shrinking wealth and tight credit remain problems. And while the Fed said economic activity is likely to remain weak for some time, it repeated its belief that stimulus policies will restore the economy to growth.
The Dow fell 23.05, or 0.3 percent, to 8,299.86, extending its slide to a fourth day and a loss of 3 percent.
But the S&P 500 index rose 5.84, or 0.7 percent, to 900.94, its first finish above 900 since Friday. The Nasdaq composite index rose 27.42, or 1.6 percent, to 1,792.34 following better- than-expected earnings from software maker Oracle.
