Stocks Falter after Fed Cuts Growth Outlook

U.S. stocks ended mostly lower on Wednesday after the Federal Reserve cut its growth forecasts and Chairman Ben Bernanke said the labor market had lost some steam. The Dow Jones Industrial Average fell 12.94 points, or 0.10%, to 12,824.39. The S&P 500 lost 2.29 points, or 0.17%, to 1,355.69. The Nasdaq Composite rose 0.69 point to 2,930.45.

The Federal Reserve on Wednesday softened its growth and inflation forecasts over the next three years, as the central bank said the unemployment rate will hold above 8% through the end of 2012. The Fed also cut its inflation forecast down aggressively, to between 1.2% and 1.7% this year, as opposed to its forecast in April between 1.9% and 2%.

The Federal Reserve on Wednesday took another unconventional step to boost the economy, and Fed Chairman Ben Bernanke said the central bank stood ready to take more action if needed.

Microsoft Corp. on Wednesday unveiled the latest version of its Windows Phone software, which will be closely tied to the company’s flagship Windows 8 operating system that will come on the market this fall.

Yahoo Inc (YHOO.O) and Facebook Inc (FB.O) believe settlement talks in a high profile patent lawsuit would be helped if a U.S. judge pushed back certain deadlines in the case, according to a court filing on Tuesday. Yahoo sued Facebook earlier this year, claiming the social networking company infringed 10 of Yahoo’s patents, including several that cover online advertising technology. In its lawsuit, Yahoo said Facebook was considered “one of the worst performing sites for advertising” prior to adapting Yahoo’s ideas.

Crude-oil futures ended at an eight-month low on Wednesday, with investors worried about supply and demand and only mildly influenced by the U.S. Federal Reserve decision. Light, sweet crude-oil futures for July delivery declined $2.23, or 2.7%, to end at $81.90 a barrel on the New York Mercantile Exchange, the lowest for a front-month contract since Oct. 5.