U.S. Stocks Close Mixed Following Fed Decision; Oil Drops

Stocks Skid on Dismal Housing Data, Fed's Downbeat View

Stocks closed Wednesday’s session mixed following the Federal Reserve's announcement the central bank would keep interest rates unchanged for “an extended period of time,” combined with a bearish report on the new-home market and a noticeable drop in the price of oil.

Stocks stumbled steadily lower through the first half of this week, and today's economic reports didn't do much to boost investor sentiment. The Commerce Department kicked things off with a bleak note on housing, as sales of new single-family homes plummeted 33% in May to tag their lowest level on record. The results were even more depressing than analysts expected, and stocks slumped in response. Meanwhile, the Federal Reserve weighed in with a notably gloomier outlook on the economy. The Federal Open Market Committee (FOMC) voted to maintain record-low interest rates for the 18th consecutive month, and made a depressing tweak to its language -- now, the group says the economic recovery is "proceeding," rather than "strengthening."
By the close, the Dow Jones Industrial Average (DJIA – 10,298.44) clawed its way to a gain of approximately 5 points, or 0.05%, as 16 of its 30 components closed higher. Boeing (BA) and JPMorgan Chase (JPM) paced the advancing equities, while General Electric (GE) and Chevron (CVX) set the tone for the unlucky 13 decliners. Meanwhile, United Technologies (UTX) shares finished flat. Despite today's modest advance, the Dow finished below its 10-day moving average for the first time since June 9.

The Dow's broad-market peers didn't fare quite as well today. The S&P 500 Index (SPX – 1,092.04) ended on a drop of 3.3 points, or 0.3%; likewise, the Nasdaq Composite (COMP – 2,254.23) finished on a deficit of 7.6 points, or 0.3%. Both the SPX and COMP finished below their respective 10-day moving averages for the second consecutive session.

Crude futures sagged today, as traders digested a round of gruesome housing data. A newly cautious outlook from the Fed didn't help matters, with the policy-making group suggesting that the economy may require record-low interest rates through 2010 in order to support growth. The day's inventory data was the final nail in the coffin for crude, with the Energy Information Administration (EIA) reporting that domestic supplies rose unexpectedly last week. By the close, crude oil for August delivery was down $1.50, or 1.9%, at $76.35 per barrel.

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