Stocks slipped slightly after Federal Reserve chairman Ben Bernanke acknowledged that the pace of the economic recovery is slower than expected, but gave no further clue for new stimulus plans.
The Dow Jones Industrial Average declined after finishing higher for the fourth straight day in the previous session.
Among the blue-chip components, GE and Boeing slipped.
The S&P 500 gained and the tech-heavy Nasdaq were also flat. The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded near 18.
Among key S&P sectors, energy and materials were higher, while utlities and consumer staples.
The Federal Reserve said the pace of the recovery was proceeding more slowly than it had expectedthough it was primarily because of temporary factors. In addition, the Fed's policysetting committee said it will maintain interest rates at exceptionally low levels for "an extended period."
Meanwhile, the FOMC downgraded economic growth forecast by half a percentage pointand expects higher unemployment until 2013 in addition to slightly more inflation.
"The reduced pace of the recovery partly reflects factors that are likely to be temporary," Bernanke said during the press conference. "Consequently...the committee expects that the pace of economic recovery will pick up overcoming quarters."
Some experts said traders were disappointed that Bernanke failed to expand on further plans to stimulate the economy, while others noted that it may never happen unless macro data continues to disappoint.
"The only way that [the Fed] could possibly consider QE3 is if the macro data refuses to improve and the market starts to take a real hit—another 15 percent from here," said Kenny Polcari, managing director of ICAP Equtiies. "But if that doesn’t happen and if things just muddle along, then I don’t think there will or should be any QE3."