Wall Street falls after FOMC decision US equity markets were disappointed after the Federal Reserve announced it will extend through the end of the year Operation Twist, the $400bn bond-purchasing programme, in which the central bank sold short-term Treasuries to buy long-dated bonds. The S&P 500 index fell 0.7 per cent to 1,348.20. The Dow Jones Industrial Average was 0.5 per cent lower to 12,868.53 while the tech-heavy Nasdaq Composite index also fell 0.5 per cent to 2,915.41. For several months, continued worries about the eurozone crisis and a global slowdown have spurred many investors to shun risky securities and seek havens. But recent expectations of central bank policy action as well as news that Greece formed a coalition government on Wednesday had lifted hopes ahead of the Fed's announcement. Scott Wren, senior equity strategist at Wells Fargo Advisors, said: "The large portion of the recent rally was due to short squeeze, as traders rushed to cover their positions in the wake of rumours of further central bank stimulus, which sent equities higher. We do not think that equities have been overbought, as they are trading at their fair-value levels at the moment. Implied volatility as measured by CBOE's Vix index, which had been falling steadily from high levels at the beginning of the month, rose to 19.16. Downbeat earnings forecasts from several large companies on Wednesday damped the mood further. Procter & Gamble, the world's largest consumer goods maker by sales, cut its earnings and revenue forecast for the second time in three months. The company's shares slid 3.4 per cent to $60.09. P&G's pessimistic view was in line with weak consumer sentiment, which hit a six-month low in June. Consumer spending accounts for about 70 per cent of all economic activity in the US. Adobe Systems, the graphic design software maker, forecast sales and profits which were below expectations. It's shares dropped 3.8 per cent to $31.63 PepsiCo also downgraded its outlook, saying that unfavourable exchange rates would hurt 2012 profit more than previously expected. The company's shares fell 1 per cent to $68.57. In other corporate news Bed Bath & Beyond, Goodrich and Red Hat were expected to announce earnings later on Wednesday