New York • Stocks retreated modestly in afternoon trading after the Federal Reserve announced it would cut back further on its economic stimulus. Bond prices fell, sending yields higher. The central bank also set the stage for a possible interest rate increase some time next year.
KEEPING SCORE: The Dow Jones industrial average fell 26 points, or 0.2 percent, to 16,309 as of 2:25 p.m. Eastern. The Standard & Poor's 500 index was down two points, or 0.1 percent, to 1,870 and the Nasdaq composite was down six points, or 0.1 percent, to 4,327. All three indexes were basically flat before the Fed's announcement.
FED DECISION: The Federal Reserve voted to further reduce its economic stimulus program, cutting its monthly bond purchases from $65 billion to $55 billion a month. The pullback was widely expected by economists. The Fed said that despite severe winter weather in January and February, the economy had recovered enough to merit a pullback in its bond-buying program.