NEW YORK - U.S. stocks ended a volatile session mostly flat on Friday as investors digested comments from Federal Reserve officials that raised questions about how quickly the central bank will end its stimulus programme.
Wall Street opened higher but subsequently pared gains after Philadelphia Fed President Charles Plosser said the Fed faced "immense" challenges now that it had reduced bond-buying, and that it needed to be cognizant of a potential rapid rise in future inflation.
Volatility was exacerbated by light trading volume, with about 4.61 billion shares traded on all U.S. platforms, according to BATS exchange data, well below average, with many market participants out in the wake of the New Year's holiday, as well as a snowstorm in the northeast.
"Plosser suggested that it might not be an easy or smooth process for the Fed to unwind its balance sheet, which could have been be an indication the Fed could act sooner on ending bond buying than is currently expected," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
Following Plosser's comments, Fed Chairman Ben Bernanke said that the central bank was no less committed to accommodative monetary policies despite the recent announcement that it would slow its stimulus programme. He also said the U.S. economic recovery "clearly remains incomplete.
Equities briefly turned positive following the comments before returning to breakeven territory.
General Motors fell 3.4 per cent to $39.57, one of the S&P 500's biggest decliners, after the automaker reported lower December sales, below analysts' expectations of a slight gain. Ford Motor Co rose 0.5 per cent to $15.51 after its sales.
The Dow Jones industrial average was up 28.64 points, or 0.17 per cent, at 16,469.99. The Standard & Poor's 500 Index was down 0.62 points, or 0.03 per cent, at 1,831.36. The Nasdaq Composite Index was down 11.16 points, or 0.27 per cent, at 4,131.91.