(Reuters) – U.S. stocks were down slightly on Wednesday after a Federal Reserve statement pointed to labor and other areas of U.S. economic weakness, suggesting it was in no rush to raise interest rates.
The central bank’s policy statement puts it on track to begin a meeting-by-meeting approach toward deciding when to raise rates, which would be the first hike since June 2006.
“We all know the Fed would love to start normalizing rates, but the simple fact is, the data does not warrant that action right now,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York.
Major indexes initially added to losses following the statement but then pared most of those declines to trade down slightly.
Earlier on Wednesday, data showed U.S. economic growth braked more sharply than expected in the first quarter as harsh weather put off shoppers and energy companies cut spending.
That, too, reinforced expectations for a gradual pace of rate rises by the Fed.
At 2:25 p.m., the Dow Jones industrial average .DJI fell 35.87 points, or 0.2 percent, to 18,074.27, the S&P 500 .SPX lost 4.86 points, or 0.23 percent, to 2,109.9 and the Nasdaq Composite .IXIC dropped 23.04 points, or 0.46 percent, to 5,032.39.
Energy, financials and materials sectors were higher, while the rest of the 10 S&P sectors were lower.
Declining issues outnumbered advancing ones on the NYSE by 1,998 to 980, for a 2.04-to-1 ratio; on the Nasdaq, 1,719 issues fell and 970 advanced, for a 1.77-to-1 ratio favoring decliners.
The S&P 500 was posting 10 new 52-week highs and 1 new low; the Nasdaq Composite was recording 43 new highs and 45 new lows.