NEW YORK: US stocks closed mostly flat Wednesday after Federal Reserve Chairman Ben Bernanke warned politicians to reach a deal to avoid sending economy over the fiscal cliff.
After a surge on the Fed's announcement of more bond purchases to support the sluggish economy, the Dow Jones Industrial Average fell back to end down 2.99 points (0.02 percent) at 13,245.45, breaking a five-day winning streak.
The S&P 500-stock index edged up 0.64 point (0.04 percent) to 1,428.48, while the tech-rich Nasdaq Composite fell 8.49 (0.28 percent) to 3,013.81.
"It was a wild day on Wall Street," said Ryan Detrick of Schaeffer's Investment Research.
"We rallied out of the gate after the Fed decision," he said, but after Bernanke's news conference "we saw some strong selling."
As expected, the Federal Open Market Committee held its key interest rate at 0-0.25 percent and announced a new $45 billion a month bond-purchase program to replace a stock-swap operation that expires at year-end.
But Bernanke put a damper on market enthusiasm when he warned that Congress and the White House needed to urgently find a solution to the fiscal cliff crisis, which could send the economy back into recession next year.
On the Dow, Wal-Mart was the biggest laggard, down 2.8 percent after chief executive Mike Duke said the retail giant's customers were worried about the fiscal cliff and the holiday shopping season was showing "very muted" positive signs.
DuPont rallied 1.4 percent after announcing a $1 billion share buyback program and updating its 2012 earnings outlook to the high end of its prior guidance.
Warren Buffett's Berkshire Hathaway bought back $1.2 billion in stock, sending its B shares up 2.4 percent.
On the Nasdaq, heavyweight Apple dropped 0.4 percent. The Wall Street Journal reported the company is working with component suppliers in Asia to test TV set prototypes, suggesting a possible move into the TV market.
Costco Wholesale fell 0.6 percent, after the warehouse club retailer posted first-quarter fiscal earnings that topped Street expectations.
Rare-earth miner Molycorp dived 3.0 percent after the departure of chief Bond prices tumbled. The 10-year US Treasury yield rose to 1.70 percent from 1.65 percent late Tuesday, while the 30-year increased to 2.90 percent from 2.84 percent.
Bond prices and yields move inversely.
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