US Markets

U.S. stocks snapped a four-day winning streak, stumbling in late trading after the Federal Reserve issued a cautious economic outlook just days before it ends its asset-buying program. The Dow Jones Industrial Average fell 80.34 points, or 0.66%, to 12109.67, while the Standard & Poor's 500-stock index dropped 8.38 points, or 0.65%, to 1287.14 and the Nasdaq Composite declined 18.07 points, or 0.67%, to 2669.19.

[Sign up to get reports daily in your inbox]

The markets started the day in negative territory, clambering to a modest gain before falling again after Fed Chairman Ben Bernanke wrapped up an afternoon news conference. In its post-meeting statement, the Fed downgraded its assessment of the U.S. economy's performance, but gave no indication it intends to take new steps to boost growth and jobs. Instead, officials said they are sticking with plans to end the purchase of $600 billion in U.S. Treasurys on June 30 and to keep short-term interest rates near zero.

The Fed also said the slower pace of recovery was likely to be temporary, citing supply-chain disruptions caused by the Japanese earthquake earlier in the year. All 10 sectors of the S&P 500 finished lower for the day, with technology and consumer-discretionary stocks falling the sharpest. Energy and materials stocks fared relatively better on a day that saw oil prices surge 1.3% to back above $95 a barrel.

Helping the bull case on Wednesday was a positive earnings report from FedEx, which saw fiscal fourth-quarter earnings and revenue top expectations. The world's largest air-cargo carrier also delivered a promising outlook, saying it expected a continued moderate pace of recovery and industrial-sector expansion, calling the recent economic softness temporary. The package-delivery company rallied 2.6%, while rival United Parcel Service gained 0.7%.

European Markets

European stocks fell Wednesday as investors looked beyond a confidence-vote victory by Greece's government to fresh evidence that the European consumer environment is showing signs of extreme stress. The Stoxx Europe 600 index fell 0.6% to 268.07, the 11th decline in the past 16 trading days.

While there was some cheer over Greek Prime Minister George Papandreou's parliamentary victory late Tuesday, investors recognized that the battle to resolve the country's debt problems is far from over. The parliament now must pass stringent austerity measures totaling EUR28 billion before Greece gets a EUR12 billion tranche of a financial aid package from the European Union.

The Greece ASE Composite index fell 0.3%. Portugal's PSI 20 index shed 0.7%. Data released Wednesday showed that consumers in the 17-nation euro bloc became less confident in June about their prospects, with the EU's confidence index falling to -10 from -9.9 in May.

Philips Electronics fell 8.8% after warning that its profit would be hit by weak consumer demand in Western Europe. In London, the FTSE 100 fell 2.32 points to 5772.99, after minutes from the last Bank of England monetary policy meeting proved to be very dovish, pushing rate-hike expectations back even further than expected. Banks led decliners after HSBC Holdings downgraded shares of Lloyds Banking Group, Barclays and Royal Bank of Scotland Group to neutral from overweight. Barclays fell 2.5%. RBS and Lloyds each declined 0.7%.

In Frankfurt, the DAX fell 0.1% to 7278.19. Merck KGaA shed 2.8% after the German drug maker said it no longer will pursue global approval of its cladribine tablets for the treatment of relapsing-remitting multiple sclerosis. In Paris, the CAC-40 fell 0.2% to 3871.37, with shares of Carrefour falling 0.5% a day after Moody's Investors Service cut the short-term credit rating on the retailer to negative from stable and changed the outlook to negative from stable.

Asian Markets

Asian markets finished mostly higher Wednesday, helped by rising hopes that Greece will avoid a debt default, though interest rate worries pressured bourses in Hong Kong and China. Japan's Nikkei Stock Average ended the session with a 1.8% advance to 9629.43, while South Korea's Kospi rose 0.8% to 2063.90.

Strong morning gains evaporated for Hong Kong's Hang Seng Index, however, with the benchmark ending little changed at 21,859.97. The Shanghai Composite Index ended a choppy day with a gain of 0.1% to 2649.32. Some rate-sensitive stocks dragged on the Hong Kong market, with Agricultural Bank of China falling 2.3%, Industrial & Commercial Bank of China down 0.7% and property developer Sino Land surrendering 2.2%. But heavyweight banks on the mainland rose on bargain-hunting, shrugging off analysts' caution about growing credit risks.

Bank of China was up 1.6%, AgBank gained 1.9%, China Construction Bank rose 1.2% and ICBC rose 0.7%. Still, the mood was mostly positive in Asia following news late Tuesday that the Greek government won a key confidence vote. Japanese financials rallied after the Greek vote, with Daiwa Securities Group up 4.3%, Mitsubishi UFJ Financial Group advancing 2.5% and Matsui Securities closing 4% higher. Hong Kong-listed Li & Fung also got a boost from the Greek vote, rising 5.6%; the fashion company depends on Europe for much its sales.

Base Metals

Base metals plodded along Wednesday to close mixed on the London Metal Exchange following a quiet, macro-driven trading session. With U.S. Federal Reserve Chairman Ben Bernanke's much-anticipated speech falling outside the LME open outcry session and problems in debt-laden Greece still bubbling in the background, market activity was subdued Wednesday and metal prices made little progress in either direction. At the close of the open outcry session, LME three-month copper traded 0.8% lower on the day at $9,010 a metric ton.

Oil futures ended higher Wednesday as traders looked past the Federal Reserve's downbeat assessment of the U.S. economy and focused on a bigger than expected decline in U.S. oil inventories. Light, sweet crude for August delivery settled up $1.24, or 1.3%, at $95.41 a barrel on the New York Mercantile Exchange. Front-month prices got a 77-cent boost overnight with the expiration of the cheaper July contract. Brent crude on the ICE futures exchange settled up $3.26, or 2.9%, at $114.21 a barrel.

Oil futures gradually rose throughout the day after the Department of Energy said oil stockpiles fell a larger than expected 1.7 million barrels last week. Futures initially pared their gains after the Federal Reserve noted in a statement that the U.S. recovery is continuing "somewhat more slowly" than previously expected, but they later recovered their momentum. Gold futures ended near a two-month high after the Federal Open Market Committee left monetary policy unchanged Wednesday.

Gold futures spiked on the announcement, with August-delivery contracts briefly touching $1,559.00 a troy ounce, but they pared those gains just as quickly. August-delivery gold, the most actively traded contract, settled up $7.00, or 0.5%, at $1,553.40 a troy ounce on the Comex division of the New York Mercantile Exchange. June delivery gold finished up $6.90, or 0.5%, at $1,552.90 a troy ounce.

More from IBT Markets:
Follow us on Facebook.
Follow us on Twitter.
Subscribe to get this delivered to your inbox daily

Visit the International Business Times for more business news and finance news.