Wall St. extends losses after weak outlook from Fed

Reuters

By Angela Moon

Federal Reserve

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The Dow, which had been trading higher for most of the day on solid earnings from blue chips, turned negative after the Fed comments, while the S&P and the Nasdaq added losses.

Technology stocks were weighing the most on the market following a rare earnings miss from tech heavyweight Apple. Apple shares fell more than 5 percent to $400.85 after the company's revenue and profits came in below estimates for the first time in years on Tuesday as it sold far fewer iPhones than expected.

"The market was just hanging even on the day and the Fed statement certainly triggered the selling, especially after the gains we saw yesterday. Investors were looking for a reason to sell," said Joseph Greco, managing director at Meridian Equity Partners in New York.

The Dow Jones industrial average <.DJI> was down 57.74 points, or 0.50 percent, at 11,519.31. The Standard & Poor's 500 Index <.SPX> was down 12.80 points, or 1.04 percent, at 1,212.58. The Nasdaq Composite Index <.IXIC> was down 46.34 points, or 1.74 percent, at 2,611.09.

On the upside, Intel Corp hit a new 52-week high of $24.50 earlier after the chipmaker forecast quarterly revenue above expectations. The stock is up 3.8 percent at $24.29.

Travelers Cos Inc advanced 6 percent to $54.51 after it said it will ramp up a share buyback dramatically.

In Greece, black-clad demonstrators hurled stones and fire bombs at police in front of parliament as tens of thousands rallied during a nationwide general strike to coincide with a vote on painful new austerity measures.

The CBOE Volatility Index VIX <.VIX>, Wall Street's so-called fear gauge, jumped more than 10 percent to 34.80.

The S&P 500 has struggled to advance as it approaches the top end of a two-month trading range at around 1,250, having gained 8.6 percent for October.

"Investors are still very much focused on what is going on in Europe and that will be overshadowing some of the good earnings we saw today here," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

Earnings reports continued to roll out, with Morgan Stanley swinging to a quarterly profit as stock trading results proved unexpectedly resilient and wealth management revenue soared. The shares were up 0.1 percent at $16.65.

Economic data showed U.S. consumer prices outside food and energy rose at their slowest pace in six months while groundbreaking on new homes rose at the fastest rate in 1-1/2 years. Stocks barely budged after the data.

(Reporting by Angela Moon, Editing by Chizu Nomiyama)

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