NEW YORK — Stocks ended the day little changed Wednesday after a rally prompted by the Federal Reserve’s latest economic stimulus program fizzled out.
The Dow Jones industrial average closed down 2.99 points at 13,245.45. It had risen as much as 81 points after the Fed said earlier in the day that it would extend a bondbuying plan and keep a key interest rate extremely low.
The S&P 500 finished 0.64 points higher at 1,428.48. The Nasdaq composite was down 8.49 points at 3,013.81.
Falling stocks narrowly outnumbered rising ones on the New York Stock Exchange. Consolidated volume, at 3.6 billion shares, was in line with the recent average.
Enthusiasm over the Fed’s announcement, which came at 11:30 a.m. CST, was shortlived. It briefly drew investors’ attention away from the tense, high-level budget talks taking place in Washington. Also, the amount of bond buying the central bank said it would undertake was in line with what investors were expecting, said Joseph Tanious, a Global Market Strategist with J.P. Morgan Funds.
“I don’t think you’re seeing markets react hugely” to the Fed, Tanious said. “Clearly what is driving markets right now is the fiscal policy. What’s holding markets hostage ... is uncertainty around the fiscal cliff.”
In Washington, lawmakers were still trying to reach a deal to avoid the “fiscal cliff,” a series of sharp tax increases and spending cuts that will hit the economy in January if Congress and President Barack Obama are unable to reach an agreement to reduce the U.S. budget deficit.
The Dow and the S&P advanced for the previous five sessions as optimism increased that a deal can be struck. The S&P is trading at its highest level in five weeks and has now erased all of its postelection losses. Stocks fell immediately after the Nov. 6 vote on concern that a divided government would struggle to resolve the budget issue.
Chemicals giant DuPont advanced 61 cents, or 1.4 percent, to $44.30 after the company unveiled plans to buy back up to $1 billion of its shares next year and said that profit for this year will reach the high end of its forecasts.
The yield on the 10-year Treasury note rose 5 basis points to 1.71 percent.
Shares of Eli Lilly and Co. fell $1.60 to $49 after the Indianapolis drugmaker said it will conduct the additional, late-stage study of its possible Alzheimer’s treatment solanezumab. The move delays a regulatory decision on a drug that flashed potential to help patients with mild cases of the disease.
Health insurer Aetna Inc. rose $1.43 to $45.91 after the company said late Tuesday that it expects sales and profit to grow next year.
Berkshire Hathaway’s Class A shares jumped $3,169, or 2.4 percent, to $134,045 after the company paid $1.2 billion to repurchase 9,200 shares from the estate of a longtime shareholder. The company’s board also approved paying higher prices for future buybacks.
Shares of Netflix rose $4.65, or 5.4 percent, to $90.73 after the Morgan Stanley raised its price target on the stock to $105 from $80 and kept its “overweight” rating. The company’s deal with Disney, announced Dec. 4, will be a boon to Netflix, according to the investment bank’s analysts.
Business, Pages 26 on 12/13/2012