The stock market stalled after an early advance Wednesday as the Federal Reserve reminded investors that it would start to wean the economy from an array of emergency supports next year.
The Dow Jones industrials slipped 11 points, while broader indexes ended with modest gains but off their highest levels of the day.
Investors knew several of the Fed's programs would be dismantled in 2010, but the added detail about its plans as well as lingering concerns about inflation tugged at the market.
The prospect of an eventual increase in interest rates and an improving economy injected some strength into the dollar, which has been on a general decline for about nine months. A rising dollar can weigh on stocks because it cuts into the profits of companies that do business overseas.
The modest moves came as the Fed said it would leave interest rates near zero, as expected, but officials also noted that the slide in the job market is "abating." Fed governors made the assessment following a two-day meeting on interest rates.
Investors parse Fed statements for insight into how policymakers are viewing the economy and for clues about when the central bank might raise interest rates. Ultra-low borrowing costs have pushed stocks higher this year and weakened demand for the dollar.
The Fed's latest pronouncement comes as investors look to lock in some of the enormous gains amassed in the stock market's run since March. Some investors worry the market could stumble next year on the questions raised again Wednesday about interest rates, inflation and the dollar.
Stocks had been higher Wednesday ahead of the Fed's announcement after a benign reading on consumer price inflation last month eased concerns that the Fed would be forced to raise interest rates soon. The Fed reinforced that notion by repeating that inflation is likely to remain under control and that interest rates would remain low for an "extended period."
Analysts said the Fed didn't want to shake up the market but wanted to leave intact its prediction that interest rates will remain low for now, but not forever.
"The Fed had no interest whatsoever in destabilizing expectations as we move to a new year," said Lawrence Creatura, equity market strategist and portfolio manager at Federated Investors in Rochester, N.Y., referring to the Fed's comments. "There are only four words that really matter in that statement: 'exceptionally low' and 'extended period.'"
The Dow Jones industrial average fell 10.88, or 0.1 percent, to 10,441.12, after rising as much as 58 points.
The broader Standard & Poor's 500 index rose 1.25, or 0.1 percent, 1,109.18. It is up 22.8 percent for the year. The Nasdaq composite index rose 5.86, or 0.3 percent, to 2,206.91.
Bond prices mostly fell, pushing yields higher, following the Fed's more upbeat assessment of the economy. The yield on the benchmark 10-year Treasury note was flat at 3.60 percent from late Tuesday.
The dollar pulled off its lows of the day after the Fed said it would begin to wrap up some of its emergency measures.
Gold, which is used to protect against inflation, climbed. Crude oil jumped $1.97 to $72.66 per barrel on the New York Mercantile Exchange.
Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, said a drop in layoffs in November gave the Fed more room to discuss dousing any signs of inflation by cutting off some of the money it is pumping into the economy.
"It marks the time when their emphasis is going to have to be a little more balanced between unemployment and inflation," he said.
Meanwhile, Intel Corp. was the biggest decliner among the 30 stocks that make up the Dow industrials after the Federal Trade Commission accused the chipmaker in a lawsuit of using tactics to snuff out competition. Intel called the FTC's case "misguided." Its stock 42 cents, or 2.1 percent, to $19.38.
Two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.2 billion shares compared with 1.1 billion Tuesday.
The Russell 2000 index of smaller companies rose 4.90, or 0.8 percent, to 611.21.
Britain's FTSE 100 rose 0.7 percent, Germany's DAX index jumped 1.6 percent, and France's CAC-40 advanced 1.1 percent. Japan's Nikkei stock average rose 0.9 percent.