Dow, S&P dip after Fed continues Twist
Specialist Frank Masiello, left, and trader Glenn Kessler work on the floor of the New York Stock Exchange. (June 11, 2012) Credit: AP
It's going to take more than low interest rates to fire up investors.
The Federal Reserve's latest plan to help the economy failed to impress Wall Street Wednesday. Stocks finished slightly lower and not much better than they were before the Fed announcement.
The Fed said it would keep its "Operation Twist" program going through year's end rather than let it expire this month. It aims to keep long-term interest rates low by selling the Fed's short-term U.S. government debt and buying long-term debt.
Economists have pointed out that long-term interest rates are already near record lows, and that consumers and businesses who aren't borrowing today won't necessarily borrow tomorrow just because it's a little cheaper.
The Fed also sharply lowered its outlook for U.S. economic growth. Chairman Ben Bernanke said the economy would grow no more than 2.4 percent this year, down from an April forecast of no more than 2.9 percent.
The Dow Jones industrial average closed down 12.94 points at 12,824.39.
The Standard & Poor's 500 index fell 0.17 percent to 1,355.69. The Nasdaq composite index rose 0.02 percent to 2,930.45.
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