U.S. stocks held onto their losses Wednesday after a statement from the Federal Reserve signaled that interest-rate increases are still possible in the coming months, though the timing remains uncertain.
 The Dow Jones Industrial Average recently traded down 50 points, or 0.3%, to 18063, while the S&P 500 was five points lower, or 0.3%, to 2109 . The Nasdaq Composite Index fell 24 points, or 0.5%, to 5032.

The Fed statement, on the heels of a two-day policy meeting, attributed the economy’s first-quarter slowdown to “transitory factors,” an indication that the central bank hasn’t ruled out higher interest rates in the months ahead.

The statement came just hours after a report from the Commerce Department showed the U.S. economy grew a paltry 0.2% in the first quarter. The reading came in well below the 1% expansion forecast by economists, and marks a significant downshift from the 2.2% pace of growth in the fourth quarter.

Still, the report gave few new clues about the specific timing or pace of rate increases, which are widely expected to be slow and methodical, traders said. Major stock benchmarks were little moved by the central bank’s 2 p.m. statement.

Moves across financial markets were also muted. The dollar pared losses against the euro but remained sharply weaker on the day following the release of disappointing U.S. GDP growth figures for the first quarter.

Treasury bonds also stayed lower after the Fed statement, which didn’t offer a clear signal on the timing of any interest-rate increase. U.S. bond prices had sunk before the Fed’s statement and the yield on the 10-year note hit a six-week high of 2.08%, along with a broad selloff in government debt markets in Europe.

“It’s a nonevent,” said Tom Carter, managing director at brokerage firm JonesTrading, who added that the sharp selloff in European markets was attracting more attention from investors. “Europe’s the bigger story.”

Stocks in Europe tumbled as the euro rose against the dollar. Germany’s DAX lost 3.2%, while France’s CAC 40 lost 2.6% and the Stoxx Europe 600 index shed 2.2%. The euro gained 1.8% to $1.1164.

In the U.S., biotechnology stocks swung between gains and losses following three straight sessions of declines. The Nasdaq Biotechnology Index recently gained 0.2%.

Health-care stocks were lower. Humana Inc. shares dropped 7.9% after the company reported earnings that fell below analysts’ expectations on an operating basis. Anthem Inc. posted first-quarter revenue that was lower than analyst forecasts, pushing shares down 2%.

U.S. stocks have advanced in recent weeks, though at an uneven pace. A weak first-quarter earnings season, coupled with slowing economic growth and uncertainty over the Fed’s timeline for interest-rate increases, have made for a rockier few months for shares.

“The economic data needs to improve,” said David Seaburg, head of sales trading at Cowen and Co. in New York. “It’s just not where it needs to be … it’s scary.”

Earnings reports were a mixed bag Wednesday. Analysts expect first-quarter earnings among S&P 500 companies to decline 1.7%, including the 277 companies that have so far reported results, according to FactSet. That would mark the biggest decline in earnings since the third quarter of 2009, though it’s an improvement from the expected earnings drop of 4.7% forecast in late March.

U.S. economic data has been weak of late, contributing to weaker quarterly results and a rockier stock market this year, said Kevin Kelly, chief investment officer at Recon Capital Partners, which manages about $200 million.

“The economic numbers certainly have been damaged, and that story that we’re doing so well is not as intact,” Mr. Kelly said. “You can see that in the market action this year, and you can see that in the earnings.”

Mr. Kelly said he remained invested in shares of large, dominant technology companies. He said he boosted his stake in Google Inc. earlier this year.

Shares of Wynn Resorts Ltd. fell 16% after the casino operator said late Tuesday that it swung to a quarterly loss.

Shares of Akamai Technologies Inc. fell 1.5% after the cloud-computing service firm reported first-quarter results that fell short of its own forecast.

Northrop Grumman Corp. shares slipped 0.5%. The defense contractor said first-quarter profit fell 19% but results topped expectations.

Starwood Hotels & Resorts Worldwide shares gained 8% after the company announced it hired investment bank Lazard to explore strategic alternatives, a move that could put the company up for sale. The hotel operator also reported lower first-quarter earnings.

Shares of Twitter fell 8%, extending Tuesday’s decline following the early release of disappointing first-quarter results.

Write to Dan Strumpf at daniel.strumpf@wsj.com and Saumya Vaishampayan at saumya.vaishampayan@wsj.com

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(END) Dow Jones Newswires

April 29, 2015 15:02 ET (19:02 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.


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