Wall Street slips from record

Wall Street fell from record highs as investors reassessed expectations for the timing of a US Federal Reserve cutback in its monthly bond-buying program following the central bank's surprise decision yesterday to maintain it for now.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.26 per cent, the Standard & Poor's 500 Index declined 0.20 per cent. The Nasdaq Composite Index inched 0.07 per cent higher.

Both the Dow and the S&P 500 had rallied to close at record highs yesterday after Fed policy makers said they had "decided to await more evidence that progress will be sustained before adjusting the pace of its purchases."

A Reuters poll of 17 primary bond dealers on Wednesday showed that nine were now looking for the Fed to cut its bond purchases at a meeting in December, one looked for a reduction in October, two others said the Fed would wait until next year, and five were not ready to make a forecast.

Even if US economic conditions did not yet meet the Fed's requirements to start easing back its support, the latest data were solid. Sales of previously-owned US homes posted a surprise increase in August, rising 1.7 per cent to the highest level in more than six years.

Separately, the Conference Board's index of leading economic indicators increased 0.7 per cent in August, while the Fed Bank of Philadelphia's general economic index climbed to a higher-than-expected 22.3 in September, up from 9.3 in August.

Jobless claims rose 15,000 to 309,000 in the week ended September 14 from a revised 294,000 in the prior period, according to Labor Department data. The gain was less than forecast.

"Overall, these reports point to a sustained pick-up in economic growth momentum," Millan Mulraine, an economist at TD Securities in New York, told Reuters.

The appeal of equities remains, Mark Lehmann, president of JMP Securities in San Francisco, told Reuters.

"The stock market is still the best house on a tough block, the best asset class at least through the rest of the year," Lehman said.

Shares of JPMorgan Chase fell, last down 1.1 per cent, after the company agreed to pay about US$920 million in fines to settle the so-called London Whale case that caused more than US$6 billion in trading losses.

In Europe, the Stoxx 600 Index gained 0.6 per cent to close at the highest level in more than five years. Germany's DAX rose 0.7 per cent to yet another record. France's CAC 40 gained 0.9 per cent, while the UK's FTSE 100 climbed 1 per cent.