Stocks Head Lower as Fed Spooks Investors
Wall Street ended an uneasy session mostly lower and bond prices tumbled Wednesday after the Federal Reserve suggested it might not be through raising interest rates if more increases are needed to fight inflation caused by soaring energy and commodities prices.</br></br>The Dow Jones industrial average rose 2.88, or 0.02 percent, to 11,642.65. The Dow is less than 80 points from its highest-ever close. The Standard & Poor's 500-stock index lost 2.29, or 0.2 percent, to 1322.85, and the Nasdaq composite index sank 17.51, or 0.7 percent, to 2320.74.</br></br>The Fed's decision to boost a key short-term lending rate to 5 percent was widely anticipated. But investors were rattled by the central bank's accompanying statement, which said more policy firming -- or rate increases -- could be necessary to contain inflation.</br></br>Bonds sold off their earlier gains after the Fed's statement. And the chance for more interest rate increases weighed on the dollar, which fell against the Japanese yen. Meanwhile, gold futures climbed past a 25-year high of $700 an ounce.</br></br>Crude oil futures rebounded Wednesday as worries about overseas supply cutoffs countered a weekly government report showing increased oil and gasoline reserves and greater refinery output.