* Fed notes economic pullback, says it's likely temporary
* Facebook increases revenue 40 pct in fourth quarter
* Amazon rallies after results, Boeing also up
* Indexes: Dow off 0.3 pct, S&P off 0.4 pct, Nasdaq off 0.4
By Angela Moon
NEW YORK, Jan 30 (Reuters) - U.S. stocks fell on Wednesday
after the Federal Reserve said in its latest statement that
economic growth had stalled but indicated the pullback was
Stocks were flat for most of the session prior to the Fed
statement at the end of a two-day policy meeting. The Fed
repeated its pledge to keep purchasing securities until
employment improves substantially.
The statement followed data that showed the economy, as
measured by gross domestic product, unexpectedly contracted in
the fourth quarter. Economists stressed that the 0.1 percent
contraction, caused partly by a plunge in government spending
and lower business inventories, is not an indicator of
"The unemployment rate is likely to fall below 6.5 percent
next year, so the Fed may be raising interest rates as soon as
mid-2014. The fiscal drag from the tax increases will be offset
this quarter by rebuilding post-Sandy, so real GDP growth should
still come in at 2 percent," said Kurt Karl, chief economist at
The S&P 500 held above 1,500, seen by technical analysts as
an inflection point that will determine the overall direction in
the near term. The index is on track to post its best month
since October 2011 and its best January since 1997.
"This is a very modest pullback after a steep run," said
Paul Zemsky, head of asset allocation at ING Investment
Management in New York.
"It is too soon for the Fed to start talking about the end
of (their bond buying program). The economy needs stimulus to
sustain this recovery."
Chesapeake Energy rose 6 percent to $20.11 a day
after it said Aubrey McClendon would step down as chief
executive. The company has had a tumultuous year in which a
series of Reuters investigations triggered civil and criminal
probes of the second-largest U.S. natural gas producer.
After the bell, shares of Facebook Inc fell 5.9
percent to $29.40 following the company's earnings announcement.
Facebook said its revenue in the fourth quarter grew 40 percent
year-on-year to $1.585 billion.
Both Boeing Co and Amazon.com shares gained
after earnings beat expectations, continuing a trend this
quarter of high-profile names advancing after results.
Amazon rose 4.8 percent to $272.76 and Boeing rose 1.3
percent to $74.59.
The Dow Jones industrial average was down 44.00
points, or 0.32 percent, at 13,910.42. The Standard & Poor's 500
Index was down 5.88 points, or 0.39 percent, at
1,501.96. The Nasdaq Composite Index was down 11.35
points, or 0.36 percent, at 3,142.31.
Thomson Reuters data showed that of the 192 companies in the
S&P 500 that have reported earnings this season, 68.8 percent
have been above analyst expectations, which is a higher
proportion than over the past four quarters and above the
average since 1994.
Research In Motion shares fell 12 percent
to $13.78 after the company, which is changing its name to
BlackBerry, unveiled a long-delayed line of smartphones in hopes
of a comeback into a market it once dominated.
Giving the market extra support, private sector employment
topped forecasts with the ADP National Employment report showing
192,000 jobs were added in January, higher than the 165,000