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US: Stocks fall after Federal Reserve move as S&P 500 record streak ends


[NEW YORK] Wall Street stocks finished lower Wednesday after the Federal Reserve kept interest rates unchanged, while Apple surged on better-than-expected profits.

The Dow Jones Industrial Average dropped 0.6 per cent to 26,430.14.

The broad-based S&P 500 tumbled 0.8 per cent to 2,923.73, ending a three-day streak of new records, while the tech-rich Nasdaq Composite Index shed 0.6 per cent to 8,049.64.

The Fed, as expected kept interest rates unchanged, describing the labour market as "strong," while highlighting a slowdown in investment by businesses and households and inflation.

The central bank's statement contained no major surprises.

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But stocks began pulling back after Fed Chair Jerome Powell said in a news conference that low inflation appeared "to be transient or idiosyncratic," a comment that analysts said suggested the US central bank would not soon cut interest rates.

Earlier, US private-sector hiring surged by 275,000 new positions in April - beating the consensus forecast by more than 100,000 - driven by a huge increase in the dominant services sector, payroll services firm ADP reported.

The figures come ahead of Friday's much-anticipated government jobs report.

Meanwhile, an industrial survey showed activity in US manufacturing had hit its slowest pace in more than two years last month on falling production and weaker demand.

Tech giant Apple surged 4.9 per cent as it reported better-than-expected quarterly results with gains in services helping to offset slumping iPhone sales.

Other companies with gains after earnings included food company Mondelez, which rose 1.6 per cent, Hilton Worldwide, up 6.5 per cent, and CVS Health, up 5.4 per cent.


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