US STOCKS-Wall St falls after Fed statement, energy shares tumble

Reuters

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    * S&P extends losses, Dow goes negative after Fed decision
    * Energy index tumbles as U.S. crude oil enters bear market
    * Bank stocks end higher as yields rise
    * Dow up 0.04 pct, S&P falls 0.25 pct, Nasdaq down 0.53 pct 

 (Updates to close, adds commentary)
    By Sinéad Carew
    NEW YORK, Nov 8 (Reuters) - The S&P 500 and Nasdaq closed
slightly lower on Thursday after a Federal Reserve statement,
and energy stocks were the biggest drag on the S&P as U.S. crude
oil prices fell.
    The U.S. central bank said after its two-day meeting that
strong job gains and household spending were keeping the economy
on track but business investment "moderated from its rapid pace
earlier in the year," creating a possible drag on future
economic growth.  urn:newsml:reuters.com:*:nTLA8MEE46
    Aside from the comment about business investments, the Fed
statement was largely as expected and suggested to investors
that the Fed's next rate hike would be in December. But some
investors had hoped for a change in tone after October's market
sell-off.
    "The Fed has recognized that there is one part of the
economy that is slowing a little bit, but it is not deterring
them from their 'gradual increase' language. Not yet anyway,”
said Jamie Cox, managing partner at Harris Financial Group,
Richmond, Virginia.
    "There is really nothing to point to what the market had
hoped, that there would be a more dovish stance. So I think this
is more of what we call a hawkish hold.”
    The Dow Jones Industrial Average  .DJI  rose 10.92 points,
or 0.04 percent, to 26,191.22, the S&P 500  .SPX  lost 7.06
points, or 0.25 percent, to 2,806.83 and the Nasdaq Composite
 .IXIC  dropped 39.87 points, or 0.53 percent, to 7,530.89.
    The three indexes had all risen 2 percent in the previous
day's session due to a relief rally once the U.S. midterm
congressional elections were in the rearview mirror.
    Quincy Krosby, chief market strategist at Prudential
Financial in Newark, New Jersey said companies were holding off
on spending because of uncertainty over a U.S.-China trade war. 
    "A slowdown in business spending can slow the underpinning
of the stock market,” Krosby said. "Is the Fed data-dependent or
is it maintaining a rigid schedule for rate hikes in 2019? What
would cause the Fed to pause? It’s clear from this statement
today that they’re looking at anything that could potentially
slow the economy." 
    The S&P bank index  .SPXBK  ended the day with a 0.4 percent
gain as U.S. Treasury yields rose because bank profits benefit
from rising rates.  urn:newsml:reuters.com:*:nL4N1XJ5Z5
    Energy stocks were the S&P's biggest drag with a 2.2 percent
drop as U.S. crude oil futures  CLc1  confirmed a bear market,
falling more than 20 percent from their Oct. 3 high as investors
focused on swelling global crude supply, which is increasing
more quickly than many had expected.  O/R  
    The Wall Street Journal reported that Saudi Arabia's top
government-funded think-tank is studying the possible effects on
oil markets of a breakup of OPEC in a story citing unnamed
people familiar with the matter.  urn:newsml:reuters.com:*:nL4N1XJ5XB
    Declining issues outnumbered advancing ones on the NYSE by a
1.26-to-1 ratio; on Nasdaq, a 1.18-to-1 ratio favored decliners.
    The S&P 500 posted 33 new 52-week highs and 4 new lows; the
Nasdaq Composite recorded 76 new highs and 81 new lows.  
   On U.S. exchanges 7.23 billion shares changed hands compared
with the 8.43 billion average for the last 20 sessions.  

 (Additional reporting by Richard Leong, April Joyner, Caroline
Valetkevitch, Lewis Krauskopf and Jessica Resnick-Ault in New
York and  Sruthi Shankar in Bengaluru; Editing by Chizu
Nomiyama, James Dalgleish and Susan Thomas)
 ((sinead.carew@thomsonreuters.com; +1 (646) 223 6186; Reuters
Messaging: sinead.carew.thomsonreuters.com@reuters.net))

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