Stocks closed slightly in the red on Wednesday, after the Federal Reserve ended its monthly bond buying program. Bobbi Rebell reports.
The U.S. central bank confirmed it's ending its bond buying program, which at its peak pumped $85 billion a month into the financial system. It also signaled confidence in the economic recovery despite signs of a slowdown in many parts of the global economy. But Fed policy remains accomodative, says Wells Fargo Advantage Funds' Brian Jacobsen: SOUNDBITE: BRIAN JACOBSEN, CHIEF PORTFOLIO STRATEGIST, WELLS FARGO ADVANTAGE FUNDS (ENGLISH) SAYING: "They are going to keep their balance sheet the same size, which means continued bond purchases. It's just that they are not going to be enlarging their balance sheet as time goes on, so it's still accommodative, but just not as accommodative. And as a result, you should maybe expect more normal like movements in the stock market as opposed to the bigger gains that we have seen over the last 2 years." Stocks - already lower at the time the statement were released - remained in the red. After the closing bell, earnings from Visa, beating estimates. Revenues also coming in stronger than forecasts. Visa also announcing a new $5 billion stock buyback, sending shares of the company higher. And insurance companies also out with numbers. Metlife and Allstate both coming in better than forecasts. In economic news, home mortgage applications fell last week to their lowest level since February. Nearly 74 percent of companies have beaten analysts estimates, according to Thomson Reuters data. Facebook's shares took a hit one day after it reported earnings. Their mobile ad business came in strong- but investors were put off by plans to dramatically boost spending next year- and by the social network's projected slowdown in revenue growth this quarter. Rocket maker Orbital Sciences shares nose-dived. Its unmanned rocket for carrying cargo to the International Space Station blew up right after its launch Tuesday night. Analysts say a delay caused by the accident could dent Orbital's profit, revenue and cash flow. Some investors got nervous over its planned merger with the aerospace unit of Alliant Techsystems, selling and pushing down Alliant's stock. Investors hit the accelerator on FiatChrysler. Shares soared when the automaker said it plans to list a 10 percent stake of its Ferrari unit and issue convertible bonds. In Europe, ahead of the Fed announcement stocks were mixed on a day of light trading.