Stocks fall after Federal Reserve says it will buy $600 billion in Treasurys

NEW YORK (AP) -- Stocks are falling after the Federal Reserve said it plans to buy $600 billion in Treasurys to stimulate the economy.
Investors had been waiting throughout the day to see exactly how big the bond-buying program would be. The Fed's aim is to drive interest rates lower in an effort to spark spending and lending.
The spending program falls largely inline with analysts' expectations.
Stocks had been rallying over the past two months, in part, due to growing expectations the Fed would provide a lift to the sluggish economy.
The Dow Jones industrial average is down 66, or 0.6 percent, at 11,124. The S&P 500 is down 7, or 0.6 percent, at 1,186, while the Nasdaq composite is down 18, or 0.7 percent, at 2,516.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) -- Stocks traded in a tight range Wednesday as investors turned their attention to the Federal Reserve after there were few surprises in the midterm elections.
The Dow Jones industrial average fell 25 points in midday trading, but still near its highest closing level in more than two years. Broader indexes also fell slightly.
By the end of the day, investors will likely know exactly how much the Fed plans to spend to stimulate the economy. The central bank has hinted for two months it plans to buy Treasurys to drive interest rates lower in an attempt to spark lending and spending. However, there was still plenty of debate about the size and length of the program, particularly in the past few days.
Lawrence Creatura, a portfolio manager at Federated Investors, said the market has factored in expectations that the Fed will buy $500 billion or less of Treasury bonds. A bigger program would most likely drive stocks higher, though there is a small possibility it could spook investors' views about the health of the economy, Creatura said.
The Fed is expected to announce details of its plan when it wraps up its meeting Wednesday afternoon. Treasury prices rose slightly, sending interest rates lower ahead of the announcement.
The Dow started with slight gains before drifting lower. It was down 25.32 or 0.2 percent at 11,163.40 in afternoon trading.
The Dow has been flirting with its highest closing level of the year, which was 11,205.03 on April 26. If it can close above that level, it would be the Dow's best finish since September 2008, just before the financial crisis peaked.
The Standard & Poor's 500 index fell 3.66, or 0.3 percent, to 1,189.91, while the Nasdaq composite index fell 9.08, or 0.4 percent, at 2,524.44.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.54 percent from 2.59 percent late Tuesday.
Key economic reports that would have normally affected trading are being overshadowed by the Fed's meeting.
Payroll company ADP said private employers added 43,000 jobs last month after cutting jobs in September, which usually would have driven buying in the market. The report is seen as a gauge heading into the government's monthly employment report, which is due out Friday. ADP indicating a rise in employment bodes well for the government saying private employers ramped up hiring, at least somewhat, last month.
The Institute for Supply Management said growth in the service sector accelerated last month when economists were expecting a slowdown in the pace of expansion. That too would normally have provided stocks a lift.
The ISM report is closely watched because the service sector accounts for about 80 percent of the nation's jobs. Earlier this week, ISM said the growth in the manufacturing activity also accelerated last month.
There were no major surprises in Tuesday's midterm elections that should sway trading Wednesday. Analysts said the market had largely accounted for Republicans taking control of the House of Representatives and Democrats holding onto a slim margin in the Senate.
Over the longer term, investors will want to see more clarity from Capitol Hill about taxes and the costs of health care and financial regulatory reform bills that passed through Congress earlier this year.