Stocks ended mixed on Wednesday in a session that saw the indexes move between gains and losses several times during the day after the FOMC minutes from the Jan. 27 & 28 meeting revealed that policymakers downgraded their projections for output and employment.
Members are now projecting that GDP will contract by up to 1.3% this year and that unemployment will remain between 6.7% and 7.5% through the end of 2011, well above its longer-run sustainable rate. Earlier, Fed chairman Bernanke pledged to do everything possible to restore stable markets and get the U.S. out of recession in a speech before the National Press Club.
The S&P finished the day with a doji candle on the daily chart, an indication the market was undecided on its next move, although it did rise in the last 30 minutes of trading. At Tuesday's close of floor trading on the NYSE, the DOW was on 7555.39 after gaining 2.79 points (0.04%) while the S&P finished on 788.4.2 with a loss of 0.75 points (-0.10%). The technology-heavy NASDAQ fared the worst, closing on 1467.97 after declining by 2.69 points (-0.18%).
The dollar traded mixed but was mostly higher on the day. The greenback ended the day gaining 0.29% on the euro, 0.10% against the pound and 1.55% against the yen while it declined by 0.68% against Australia's dollar.
Treasuries fell, pushing up two-year note yields the most since November, as speculation grew that the U.S. will sell record amounts of debt next week. Yield on the 2-year note rose 11 basis points to 0.96% while yield on the 10-year note rose 8 basis points to 2.73%.
Crude for March delivery was recently trading down 35 cents (-1.00%) to $34.58 per barrel.
Gold for April delivery was recently trading higher by $20.20 (2.09%) to 987.20 per ounce.
President Obama outlined the government's plan for stemming the housing crisis, pledging $275 billion to a program that includes cutting mortgage payments for as many as 9 million struggling homeowners and expanding the role of Fannie Mae and Freddie Mac in curbing foreclosures.
The plan will help as many as 5 million homeowners refinance loans owned or guaranteed by Fannie and Freddie, the president said. Treasury will buy as much as $200 billion of preferred stock in the two mortgage companies, twice as much as previously promised, he said.
“It will give millions of families resigned to financial ruin a chance to rebuild,” Obama said in Mesa, Arizona. “By bringing down the foreclosure rate, it will help to shore up housing prices for everyone.”