NEW YORK: Stocks mostly fell in a volatile session on Wednesday, June 23 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 500 and Nasdaq finished lower, while the Dow eked out a tiny gain.

The Fed renewed its vow to hold benchmark interest rates exceptionally low, but its less bullish statement hurt a broad range of stocks. 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 .DJI edged up 4.92 points, or 0.05 percent, to finish at 10,298.44. But the Standard & Poor's 500 Index .SPX dipped 3.27 points, or 0.30 percent, to close at 1,092.04. The Nasdaq Composite Index .IXIC fell 7.57 points, or 0.33 percent, to close at 2,254.23.

DELL UP, NIKE DOWN AFTER THE BELL

After the closing bell on Wednesday, Dell Inc (DELL.O) shares rose 2 cents to $13.84 after giving a full-year outlook.

Paychex Inc (PAYX.O) fell 3.6 percent to $26.43 in extended-hours trading after the company reported its fourth-quarter results.

Nike Inc (NKE.N) lost 2.1 percent to $71.02 after its results.

Bed Bath & Beyond (BBBY.O) shed 6.5 percent to $38.78 after the bell, after it forecast a lackluster second-quarter profit.

HOME SALES PLUNGE

Earlier in the day, the Commerce Department said that sales of new homes fell to their lowest level ever in May. Homebuilders' 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.

Supporting the Dow was Boeing Co (BA.N), which gained 1.8 percent to $67.45. Earlier, the U.S. aircraft manufacturer received a $216 million contract from the U.S. Air Force.

August U.S. crude futures sank 2 percent, or $1.50, to settle at $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 nearly 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. - Reuters