NEW YORK (AP) - The Federal Reserve did not surprise investors but still left them disappointed.

Stocks ended mixed but mostly higher after the Fed said the economy was on the mend. However, bond prices fell after the Fed said it would not step up its spending to purchase Treasurys and other debt to pry interest rates lower.

The central bank's decision yesterday to leave its key lending rate at a low of zero to 0.25 percent was not a surprise but some investors have been hoping the central bank would do more to revive the economy. Others wanted it to more clearly lay out how it will keep inflation in check.

"The Fed is still stuck on that tightrope of trying to make sure they provide enough reassurance to keep the recovery going but at the same time try to allay the concern that they won't allow inflation to get going either," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

In the economic assessment statement accompany its rate decision, the Fed said the economy's rate of decline appears to be slowing. It noted that consumer spending has shown further signs of stabilising although job losses, shrinking wealth and tight credit remain problems. And while the Fed said economic activity is likely to remain weak for some time, it repeated its belief that stimulus policies will restore the economy to growth.

Policymakers noted that energy and other commodities prices have risen, although they said "substantial resource slack" would likely rein in cost pressures and that inflation "will remain subdued for some time".

The Fed also did not say it would increase its purchases of Treasurys or other kinds of government debt, disappointing some investors who had hoped for more. The Fed has said it would buy $1.25 trillion in mortgage-backed securities and $300 billion in Treasurys in an effort to stimulate the economy by keeping borrowing rates low.

According to preliminary calculations, the Dow Jones industrial average fell 23.05, or 0.3 percent, to 8,299.86. The Standard & Poor's 500 index rose 5.84, or 0.7 percent, to 900.94, and the Nasdaq composite index rose 27.42, or 1.6 percent, to 1,792.34.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.63 percent on Tuesday.

Although the Fed has held its target interest rate steady since late last year, its statements have touched off big moves in stocks. In January, the statement coincided with hopes for a plan for banks' toxic assets; in March, the Fed announced it would start buying Treasurys; and in April, the Fed said it was seeing signs the recession is easing.

"I don't think there's a whole lot of real good news," said Steven Stahler, president of The Stahler Group in Baton Rouge, Louisiana, referring to the Fed's outlook. "There's absolutely no clear-cut view or clear-cut evidence that we're out of the woods. There's nothing here that is a nice green light. It's more of the same."

Stocks had been sharply higher early in the day following a surprise jump in orders for big-ticket manufactured items. The Commerce Department said durable goods orders rose 1.8 percent in May. Economists surveyed by Thomson Reuters had anticipated a drop.

The Commerce Department later said sales of new homes fell 0.6 percent last month, while the market had expected a rise.

Recent gauges of the economy have been improving, but they have not yet pointed to growth. Many investors are nervous that a recovery could be hampered if the Fed raises interest rates too soon or starts dismantling its emergency supports for the financial system.

In corporate news, software maker Oracle Corp.'s results late on Tuesday for its most recent quarter exceeded analysts' average forecast. Oracle shares gained $1.39, or seven percent, to $21.26, helping the tech-heavy Nasdaq.

Bond prices had been higher after a successful Treasury Department auction of $37 billion in five-year notes. Demand was stronger than at recent auctions.

Auctions have been going smoothly this year, but both bond and stock investors are looking for signs that demand for new Treasury supply might be waning. If demand trails off, the government will have to raise yields sharply to attract buyers. Treasury yields are closely tied to borrowing rates for consumers on loans such as mortgages.

In other trading, crude oil fell 57 cents to settle at $68.67 a barrel on the New York Mercantile Exchange.

The dollar was mixed against other major currencies. Gold prices rose.