Stocks fall amid questions about Fed plan

NEW YORK - Stock prices fell Wednesday as concerns grew over whether the Federal Reserve's plans to buy Treasury bonds might be smaller and slower than anticipated.

Stocks had been rising in recent weeks due to a number of strong earnings reports and mounting expectations that the Fed would embark on another round of bond-buying to stimulate the economy.

Traders have been anticipating the Fed would buy between $500 billion and $1 trillion in Treasurys to drive interest rates lower and encourage lending and spending. A report in The Wall Street Journal said the Fed's bond purchases might amount to a few hundred billion dollars over several months, which would fall short of those predictions.

"The higher the number, the better for the market," said Michael Gault, a senior portfolio strategist at Weiser Capital Management. "Every measured step from that, the market will pull back."

The Fed meets next week and details of any stimulus are expected to be announced when the meeting wraps up Nov. 3.

The Dow fell 43.18, or 0.4 percent, to 11,126.28, despite trading as much as 150 points lower.

The Standard & Poor's 500 index fell 3.19, or 0.3 percent, to 1,182.45. The technology-focused Nasdaq composite index was the only broad market index to rise, gaining 5.97, or 0.2 percent, to 2,503.26.

A report on durable goods orders gave a mixed picture of the health of the economy. The Commerce Department said durable goods rose faster than economists had forecast in September. However, excluding the volatile transportation sector, orders fell. Economists polled by Thomson Reuters had forecast a rise in orders excluding transportation.

The report indicates the pace of growth in manufacturing is slowing. Manufacturing had been one of the brightest spots in the economy during the first half of the year.

Sales of new homes rose slightly faster than economists had expected last month, but still remain near their lowest levels on record.

Joe Murin, chairman of the Collingwood Group, said lower interest rates on mortgages that could occur if the Fed buys more bonds won't spark more demand for the loans and help lift sales. Only renewed consumer confidence will do the trick, Murin said.

"Interest rates are (already) at an all-time low" and there's no demand, Murin added. Driving rates even lower would also make investors who buy mortgages from banks even less interested in them because returns would be so small, he said.

Earnings reports announced Wednesday were mixed. Procter & Gamble said its profit slipped during the most recent quarter, but still beat forecasts. Its shares rose 22 cents to $63.08.

Sprint Nextel reported a wider loss. It shares fell 47 cents, or 9.9 percent, to $4.30.

Financial companies and technology companies were the only groups amid the Standard and Poor's 500 index to see their shares end the day with gains. Bank of America Corp. gained 24 cents, or 2.1 percent, to finish as the top stock among the 30 companies in the Dow. Shares in the company have fallen 11.9 percent this month.

Merck & Co. Inc. fell 61 cents, or 1.6 percent, as the index's laggard.

Bond prices fell slightly. The yield on the 10-year Treasury is 2.72 percent, up from 2.64 percent in late Tuesday's trading. Bond prices and yields move in opposite directions.

Two shares fell for every one that rose on the New York Stock Exchange, where consolidated trading volume came to 4.3 billion shares.