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Stocks mixed; Fed tapers and GDP better than forecast

U.S. stocks wavered on Wednesday after a report had the economy growing more than expected in the second quarter and the Federal Reserve continued tapering asset purchases and its ultra-easy monetary policy.

"The bulls look at the strength in the second quarter, and the skeptics say you're getting a lot of bounce back from first-quarter weakness. The question is how do things look in the third and fourth quarters, and the answer is we don't know. A lot hinges on the employment report on Friday," said Bruce McCain, chief investment strategist at Key Private Bank.

Treasuries rose, with the benchmark 10-year yield used to figure mortgage rates and other consumer loans surging 10 basis points to 2.556 percent.

Voting to cut another $10 billion from its monthly bond buys, the central bank left its short-term interest rate target near zero and signaled minimal cheer about growth.

"The statement was still very, very dovish. It's about as benign as you can have in a statement given the strengthening economy. So we have the best of both worlds, we have pretty good reassurances that the Fed intends to remain rather inactive in terms of raising rates for the foreseeable future," said McCain.

Fed Bank of Philadelphia President Charles Plosser was the sole dissenter, objecting to the "considerable time" phrasing as related to the window of how long the central bank would wait until it begins raising the Fed funds rate.

"If every economist in the room agrees with the position, then you know some of them are asleep," said McCain in downplaying the significance of Plosser's vote.

Stocks had mostly fallen on Wednesday after the Commerce Department reported the economy grew 4 percent in the second quarter, with the faster-than-estimated pace fueling speculation that the Federal Reserve could move on rates more quickly than anticipated.

Read MoreUS growth surges by 4 percent after a frost first quarter

"The Fed is not going to be able to wait a year to raise interest rates; what they should do is raise them at the end of this year, what they will do is move at the beginning of next year, as opposed to the middle or end, which is what people think," said Peter Boockvar, chief market analyst at the Lindsey Group. Boockvar said.

Separately, ADP reported the private sector added 218,000 jobs in July.

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After a 71-point rise, the Dow Jones Industrial Average fell 31.75 points, or 0.2 percent, to 16,880.36, with Coca-Cola leading blue-chip losses that extended to 19 of 30 components.

The S&P 500 held steady, gaining a fraction to 1,970.07, with consumer discretionary the best performing and utilities faring the worst among its 10 major sectors.

Twitter jumped after the social-media company reported results that beat expectations.

The Nasdaq climbed 20.20 points, or 0.5 percent, to 4,462.90.

The CBOE Volatility Index, a measure of investor uncertainty, climbed 0.8 percent to 13.40.

For every two stocks rising, three declined on the New York Stock Exchange, where 680 million shares traded. Composite volume surpassed 3.4 billion.

Eric Thayer | Stringer | Getty Images

On the New York Stock Exchange, gold futures dropped $3.40 to $1,294.90 an ounce; crude futures shed 70 cents to $100.27 a barrel.

On Tuesday, U.S. stocks declined, pulling the Dow under 17,000, as the United States and European Union joined in expanding sanctions against Russia, highlighting a geopolitical crisis that overrode investor enthusiasm for earnings from corporations including Merck & Co.

Read MoreStocks fall; Ukraine concerns overtake earnings cheer

—By CNBC's Kate Gibson

Coming Up This Week:

Thursday

Earnings: Exxon Mobil, Conoco Phillips, Diageo, Occidental Petroleum, Royal Dutch Shell, Public Storage, Siemens, MasterCard. A-B InBev, AstraZeneca, Sanofi, Tesla, Expedia, GoPro, LinkedIn, Time Warner Cable, Alcatel-Lucent, Apache, Teva, Delphi Automotive, Ball Corp, Becton Dickinson, CME Group, Hyatt, Colgate-Palmolive, Kellogg, Marathon Petroleum, Mosaic, Newell Rubbermaid, McKesson, PG&E, Sony, Avon Products, Beazer Homes, Fortress Investments, Scana, Generac, DirecTV, 3-D Systems, SunPower, Seattle Genetics

8:30 a.m. Jobless claims

8:30 a.m. Employment cost index, 2Q

9:45 a.m. Chicago PMI

Friday

Earnings: Procter and Gamble, Chevron, CBOE, Axa, Calpine, Clorox, ArcelorMittal, Weyerhaeuser

Monthly vehicle sales

8:30 a.m. Employment report

8:30 a.m. Personal income and spending

9:55 a.m. Consumer sentiment

10:00 a.m. ISM Manufacturing

10:00 a.m. Construction spending

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