By Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks on Wednesday retreated from five-year highs after the Federal Reserve said growth in economic activity had paused in recent months and maintained its monetary policy.

Many had expected the Federal Open Market Committee to upgrade its assessment of the economy, yet the Fed "did not sound any more optimistic about the economic backdrop," said Dan Greenhaus, chief global strategist at BTIG LLC.

Jim Russell, senior equity strategist and regional investment director at U.S. Bank Wealth Management, said the central bank could have given "a nod to the slight improvement in the labor market nationwide."

The stock indexes tallied modest losses in the wake of the Fed's release, which had the central bank holding interest rates near zero while maintaining its bond-buying program.

"A lot of the market's rise is due to global central banks being more accommodative," said Russell, who also noted the FOMC has four new members, collectively viewed as "slightly more hawkish," a reference to those more concerned with curbing inflation than keeping interest rates down.

Up 6.2% month-to-date and on track for its best January in 24 years, the Dow Jones Industrial Average (DJI) was lately off 42.31 points, or 0.3%, to 13,912.11.

Boeing Co. (BA) was among blue-chip gainers after the aircraft maker reported quarterly earnings and revenue that beat Wall Street's estimates.

The S&P 500 index (SPX) dropped 5.93 points, or 0.4%, to 1,501.91, with the industrial sector the worst performer and utilities the best of its 10 major industry groups.

U.S.-listed shares of BlackBerry maker Research In Motion Ltd. (RIMM) fell 9.5% after the Canadian company said it would change its name to BlackBerry.

The Nasdaq Composite (RIXF) fell 10.90 points, or 0.4%, to 3,142.75, with the technology-laden index getting some support by a 5% rise in shares of Amazon.com Inc. (AMZN) a day after the online retailer reported better-than-expected fourth-quarter gross profit margins.

Social-networking company Facebook Inc. (FB) climbed 1.2% ahead of its quarterly earnings report expected after Wednesday's close.

Decliners outdid advancers nearly 2 to 1 on the New York Stock Exchange, where nearly 449 million shares traded as of 3:20 p.m. Eastern. Composite volume exceeded 2.8 billion.

Stocks had fluctuated between small gains and losses after reports showed the economy contracted in the final quarter of 2012 but better-than-anticipated payrolls growth in January.

"That's probably the most favorable contraction in GDP that you could have hoped for," said Russell at U.S. Bank of the 0.1% annual rate decline in gross domestic product, which was largely due to a sharp drop in military spending and a smaller gain in stockpiles.

The Commerce Department reported fourth-quarter gross domestic product dropped at a 0.1% annual rate, the worst performance since the second quarter of 2009, when the economy remained in recession.

A separate report from a payrolls processor said private companies added 192,000 workers in January, with the better-than-expected rise coming ahead of Friday's nonfarm payrolls report for January.

Treasury prices were mixed, with the benchmark 10-year yield (10_YEAR) holding steady at 2%.

The U.S. dollar (DXY)fell against other global currencies, including the euro (EURUSD).

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