Investing.com - U.S. stocks ended Wednesday mixed after the Federal Reserve released the minutes of its December monetary policy meeting that contained language viewed by markets as a hint monthly bond purchases will continue to wind down in 2014.
At the close of U.S. trading, the Dow Jones Industrial Average fell 0.41%, the S&P 500 index fell 0.02%, while the Nasdaq Composite index rose 0.30%.
At its Dec. 17-18 policy meeting, the Fed voted to trim its monthly asset purchasing program to USD75 billion from USD85 billion but stressed benchmark interest rates will stay at 0.00-0.25% until the unemployment rates approaches 6.5% or even dips below that mark, depending on the health of the economy in the context of price stability.
Markets interpreted language released Wednesday as a sign the economy is improving and will soon be in less need of monetary stimulus tools, which may have already served their purposes, the Fed said.
"Many members judged that the Committee should proceed cautiously in taking its first action to reduce the pace of asset purchases and should indicate that further reductions would be undertaken in measured steps," the minutes read.
"Members also stressed the need to underscore that the pace of asset purchases was not on a preset course and would remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the efficacy and costs of purchases," the minutes read.
Fed bond purchases aim to suppress long-term interest rates to spur recovery, making asset classes like stocks more attractive with the goal of encouraging more investment and hiring.
Talk of less Fed intervention can send stock prices falling by stoking uncertainty as to how markets will perform without a crutch from the U.S. central bank.
Some monetary authorities expressed the need to continue scaling back asset purchases on concerns that the benefits of the program were waning.
"A majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue, although some noted the difficulty inherent in making such an assessment," the minutes read.
"A couple of participants thought that the marginal efficacy of the program was not declining, as evidenced by the substantial effects in financial markets in recent months of news about the likely path of purchases," the minutes read.
Elsewhere, payroll processor ADP reported that private-sector nonfarm payrolls rose by 238,000 in December, surpassing consensus forecasts for an increase of 200,000. November’s figure was revised up to a gain of 229,000 from a previously reported increase of 215,000.
The numbers fueled hopes that the official December jobs report due out on Friday will meet or beat expectations as well and prompt the Fed to wind down the stimulus program even further.
Leading Dow Jones Industrial Average performers included DuPont, up 1.28%, JPMorgan Chase, up 0.93%, and Pfizer, up 0.67%.
The Dow Jones Industrial Average's worst performers included AT&T, down 2.07%, Microsoft, down 1.85%, and Verizon, down 1.67%.
European indices, meanwhile, finished lower.
After the close of European trade, the EURO STOXX 50 fell 0.22%, France's CAC 40 fell 0.04%, while Germany's DAX 30 fell 0.09%. Meanwhile, in the U.K. the FTSE 100 finished down 0.50%.
On Thursday in the U.S., the Labor Department is to release its weekly report on initial jobless claims.
At the close of U.S. trading, the Dow Jones Industrial Average fell 0.41%, the S&P 500 index fell 0.02%, while the Nasdaq Composite index rose 0.30%.
At its Dec. 17-18 policy meeting, the Fed voted to trim its monthly asset purchasing program to USD75 billion from USD85 billion but stressed benchmark interest rates will stay at 0.00-0.25% until the unemployment rates approaches 6.5% or even dips below that mark, depending on the health of the economy in the context of price stability.
Markets interpreted language released Wednesday as a sign the economy is improving and will soon be in less need of monetary stimulus tools, which may have already served their purposes, the Fed said.
"Many members judged that the Committee should proceed cautiously in taking its first action to reduce the pace of asset purchases and should indicate that further reductions would be undertaken in measured steps," the minutes read.
"Members also stressed the need to underscore that the pace of asset purchases was not on a preset course and would remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the efficacy and costs of purchases," the minutes read.
Fed bond purchases aim to suppress long-term interest rates to spur recovery, making asset classes like stocks more attractive with the goal of encouraging more investment and hiring.
Talk of less Fed intervention can send stock prices falling by stoking uncertainty as to how markets will perform without a crutch from the U.S. central bank.
Some monetary authorities expressed the need to continue scaling back asset purchases on concerns that the benefits of the program were waning.
"A majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue, although some noted the difficulty inherent in making such an assessment," the minutes read.
"A couple of participants thought that the marginal efficacy of the program was not declining, as evidenced by the substantial effects in financial markets in recent months of news about the likely path of purchases," the minutes read.
Elsewhere, payroll processor ADP reported that private-sector nonfarm payrolls rose by 238,000 in December, surpassing consensus forecasts for an increase of 200,000. November’s figure was revised up to a gain of 229,000 from a previously reported increase of 215,000.
The numbers fueled hopes that the official December jobs report due out on Friday will meet or beat expectations as well and prompt the Fed to wind down the stimulus program even further.
Leading Dow Jones Industrial Average performers included DuPont, up 1.28%, JPMorgan Chase, up 0.93%, and Pfizer, up 0.67%.
The Dow Jones Industrial Average's worst performers included AT&T, down 2.07%, Microsoft, down 1.85%, and Verizon, down 1.67%.
European indices, meanwhile, finished lower.
After the close of European trade, the EURO STOXX 50 fell 0.22%, France's CAC 40 fell 0.04%, while Germany's DAX 30 fell 0.09%. Meanwhile, in the U.K. the FTSE 100 finished down 0.50%.
On Thursday in the U.S., the Labor Department is to release its weekly report on initial jobless claims.