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1st LD Writethru: U.S. stocks tumble after Fed statement

Xinhua, January 28, 2016 Adjust font size:

U.S. stocks ended sharply lower Wednesday, as Wall Street digested the newly-released Federal Reserve's statement amid downbeat quarterly earnings reports.

The Dow Jones Industrial Average dropped 222.77 points, or 1.38 percent, to 15,944.46. The S&P 500 lost 20.68 points, or 1.09 percent, to 1,882.95. The Nasdaq Composite Index shed 99.51 points, or 2.18 percent, to 4,468.17.

The U.S. central bank will maintain the target range for the federal funds rate at 0.25 percent to 0.5 percent, pledging to keep the monetary policy accommodative to support economic growth, the Fed said in a statement after the conclusion of its two-day monetary policy meeting.

According to the statement, U.S. labor market conditions improved further even as economic growth slowed late last year and household spending and business fixed investment have been increasing at moderate rates in recent months.

"The committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation," said the Fed's policy-setting committee.

"A March rate hike is still on the table," said Chris Low, chief economist at FTN Financial, in a note.

"Looking ahead to March, we find ourselves in the odd position that the Fed is almost certain to hike if markets stabilize in the next month and half, but might not hike if markets continue to slide," he added.

Corporate earnings from big companies came out negative. Apple Inc. plunged 6.55 percent to 93.44 U.S. dollars apiece Wednesday after posting disappointing quarterly results.

After Tuesday's closing bell, the iPhone maker reported lower-than-expected unit sales of its flagship product and gave guidance below forecasts, though the company delivered record quarterly revenue of 75.9 billion U.S. dollars for its fiscal 2016 first quarter ended Dec. 26, 2015.

Shares of the Boeing Company plummeted 8.93 percent to 116.58 dollars apiece Wednesday after the aerospace giant's full-year guidance missed market estimates.

On the economic front, U.S. sales of new single-family houses in December 2015 were at a seasonally adjusted annual rate of 544,000, beating market consensus, said the Commerce Department Wednesday. Endit