Fed action sends dollar higher, gold lower

NEW YORK - An optimistic statement from the Federal Reserve sent the dollar up and gold prices down Wednesday as traders prepared for rising interest rates.

Major U.S. stock indexes ended with a slight loss after the Fed confirmed it was shutting down a bond-buying program because the economy no longer needs as much help.

At the end of a two-day meeting, the Fed said it had ended its $4 trillion bond-buying program, known as quantitative easing, or QE for short, as a result of "underlying strength in the broader economy."

The Standard & Poor's 500 index fell 2.75 points, or 0.1 percent, to 1,982.30. The Dow Jones industrial average fell 31.44 points, or 0.2 percent, to 16,974.31. The Nasdaq composite fell 15.07 points, or 0.3 percent, to 4,549.23.

The S&P 500 index, the benchmark for most investment funds, is now up half a percent for October. It had slumped as much as 6 percent on Oct. 15 as a host of concerns sent markets tumbling.

Gold dropped and the dollar jumped after the statement came out Wednesday afternoon. Gold fell $17.70, or 1.4 percent, to $1,211.70 an ounce. Silver fell 14 cents, to $17.09 an ounce. Copper lost a penny, to $3.08 a pound.

A widely used gauge of the dollar's strength against other currencies, the ICE dollar index, rose 0.6 percent, to 85.96.

U.S. government bond prices dipped, nudging the yield on the 10-year Treasury note up to 2.32 percent.

Solid earnings from Caterpillar, Microsoft, and other big companies have helped the stock market recover from its October slide. Nearly half the big companies in the S&P 500 index have turned in third-quarter results, and more than seven out of 10 have cleared analysts' targets, according to S&P Capital IQ. Earnings are on track to rise 6 percent for the third quarter.

Facebook lost 6 percent after its chief financial officer said expenses for the social-networking giant could increase by as much as 75 percent next year as it ramps up spending on investments. Its stock dropped $4.91, to $75.86.

Orbital Sciences Corp. sank on news that its Antares rocket exploded moments after lifting off from the launch pad on Tuesday. The rocket was carrying a supply ship for astronauts on the International Space Station, part of Orbital's contract with NASA. Orbital's stock plunged $5.10, or 17 percent, to $25.27.

In the commodity markets, benchmark U.S. crude oil rose 78 cents, to $82.20 a barrel. Brent crude, the global benchmark, gained $1.09, to $87.12 a barrel in London. The U.S. Energy Department said U.S. crude oil supplies rose by 2.1 million barrels last week, about 700,000 barrels below expectations of analysts surveyed by Platts.

In other trading, wholesale gasoline rose 2.5 cents, to $2.22 a gallon. Heating oil added 4.2 cents, to $2.54 a gallon, and natural gas jumped 7.9 cents, to $3.73 per 1,000 cubic feet.