* Fed maintains "exceptionally low" rate vow
* But U.S. central bank less bullish about recovery
* New home sales drop to record low in May
* Crude oil tumbles on demand concerns
* S&P, Nasdaq down 0.3 pct, Dow up less than 0.1 pct
* For up-to-the-minute market news see []
(Updates to close)
By Ryan Vlastelica
NEW YORK, June 23 (Reuters) - U.S. stocks fell in a
volatile session on Wednesday after the Federal Reserve
downgraded its assessment of the economic recovery as it vowed
to keep cheap money flowing.
The market bounced between positive and negative territory
as investors wrestled over the implications of the Fed's
statement in the afternoon on the economy and interest rates.
The S&P and Nasdaq finished lower while the Dow was little
changed.
The Fed renewed its vow to hold benchmark interest rates
exceptionally low, but its less bullish statement hurt a broad
range of stocks. For details see []. Banks were
among the day's weakest. The KBW Banks index <.BKX> dropped 0.7
percent while Bank of America Corp <BAC.N> lost 0.9 percent to
$15.43. [].
"There was definitely a more negative tone," said Dan Cook,
senior market analyst at IG Markets in Chicago. "The Fed
doesn't have a great outlook, but that wasn't totally
unexpected with the housing and labor market data we've seen
lately."
The Dow Jones industrial average <> was up 4.92 points,
or 0.05 percent, at 10,298.44. The Standard & Poor's 500 Index
<.SPX> was down 3.27 points, or 0.30 percent, at 1,092.04. The
Nasdaq Composite Index <> was down 7.57 points, or 0.33
percent, at 2,254.23.
The Commerce Department said earlier on Wednesday that
sales of new homes fell to their lowest level ever in May.
Homebuilder shares, however, rebounded after initial weakness
on the news on the assumption that the worst was over for the
crippled sector. Some analysts speculated the weakness in sales
could prompt the government to renew the home buyer's tax
credit. []
The S&P home builders ETF <XHB.P> rose 1.2 percent after
falling to a four-month low after the data. D.R. Horton Inc
<DHI.N> advanced 2.5 percent to $10.47.
Limiting losses in the Dow was Boeing Co <BA.N>, which
gained 1.8 percent to $67.45. Earlier, the planemaker received
a $216 million contract from the U.S. Air Force.
[]
August crude futures sank 2 percent to $76.35 per barrel as
a big increase in U.S. crude inventories cast doubt on demand
prospects and a downturn in a broad array of commodities
diminished risk appetite. []
"It's going to be a drawn-out recovery and a while before
we start seeing demand for oil pick up again," Cook said.
In earnings news, Jabil Circuit Inc <JBL.N> rallied 11
percent to $15.03 a day after it reported third-quarter
earnings that beat expectations and forecast strong
fourth-quarter results. []
Tobacco company Philip Morris International Inc <PM.N> rose
3.3 percent to $46.49 after it said its earnings would grow
more than expected this year. []
On the downside, Adobe Systems Inc <ADBE.O> slumped 7.3
percent to $30.38 a day after reporting second-quarter results.
[]
About 8.13 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, well below
last year's estimated daily average of 9.65 billion.
Declining stocks outnumbered advancing ones on the NYSE by
a ratio of about 8 to 7, while on the Nasdaq about 7 stocks
fell for each 6 that rose.
(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)
