Stocks fall amid questions about Fed plan

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

Another day of mixed earnings and economic reports also dragged down stocks. The Dow Jones industrial average fell about 43 points Wednesday.

Traders were disappointed with earnings at Sprint Nextel Corp. and ConocoPhillips. Procter & Gamble Co. was one of the few companies' shares to rise after it beat forecasts.

Stocks had been rising in recent weeks because of some mostly upbeat earnings 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 Wednesday.

The Dow fell 84.84, or 0.8 percent, to 11,084.62 in afternoon trading.

The Standard & Poor's 500 index fell 7.38, or 0.6 percent, to 1,178.26, while the Nasdaq composite index fell 2.61, or 0.1 percent, to 2,494.68.

Treasury prices fell Wednesday, driving interest rates higher.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.69 percent from 2.64 percent late Tuesday. It briefly climbed above 2.70 percent Wednesday for the first time since late September, just before the Fed first hinted it was considering buying bonds to stimulate the economy.

Procter & Gamble said its profit slipped during the most recent quarter, but still beat forecasts. Its shares rose 12 cents to $62.99.

Sprint Nextel reported a wider loss. It shares fell 51 cents, or 10.5 percent, to $4.26.

A report on durable goods orders also provided 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.

Signs of a strong economy could lead the Fed to ratchet back its plans. A key reading on gross domestic product, the broadest measure of the country's economic growth, is due out Friday.