Stocks finished flat to slightly higher on Wednesday after the Federal Reserve reiterated its intention to keep interest rates low for the foreseeable future to ensure a sustainable economic recovery.

Wall Street trimmed gains after the Fed voted unanimously to keep benchmark borrowing costs in a range of zero to 0.25 percent, which represents historic lows.

The central bank's policy-making committee also reminded markets it will let most of the special liquidity facilities, which have helped bolster the U.S. banking system after last year's credit crisis, expire by early next year.

The liquidity pullback, people are looking at it and saying we're not going to get that free run that we've had in the stock market, we're not going to have all that free capital that we had previously, said Dan Cook, senior market analyst at IG Markets in Chicago.

That will have people concerned, heading into the new year.

Financial stocks, which had initially climbed after sources said global banking regulators will give institutions a grace period before enforcing more stringent capital rules, also slipped after the Fed's statement.

The S&P Financial Index <.GSPF> rose 0.7 percent, retreating from earlier gains of more than 1 percent. JP Morgan Chase & Co , a Dow component and the second-largest U.S. bank, added 1.2 percent to $41.36.

The Dow Jones industrial average <.DJI> slipped 10.88 points, or 0.10 percent, to end at 10,441.12. But the Standard & Poor's 500 Index <.SPX> gained 1.25 points, or 0.11 percent, to 1,109.18. The Nasdaq Composite Index <.IXIC> added 5.86 points, or 0.27 percent, to 2,206.91.

After the closing bell, Citigroup Inc shares slid 3.5 percent to $3.33 after CNBC reported the bank's equity offering had been priced at $3.15 per share.

MILD CPI, HEALTHIER HOUSING DATA

Earlier in the session, data from the Labor Department showed the overall U.S. Consumer Price Index rose 0.4 percent in November, in line with expectations, which eased inflation worries and lifted stocks.

Home builders' stocks climbed after Commerce Department data showed new U.S. housing starts increased 8.9 percent in November, the largest monthly percentage gain since May, indicating the housing sector remains on a steady recovery path.

The Dow Jones U.S. Home Construction index <.DJUSHB> jumped 4.4 percent, led by KB Home , up 6 percent at $13.59 on the New York Stock Exchange.

But after the closing bell, shares of Hovnanian Enterprises Inc tumbled 13.2 percent to $3.67 in extended trade after the No. 5 U.S. home builder posted a quarterly loss that was much bigger than Wall Street's expectations.

During the regular session, chipmaker Intel slid 2.1 percent to $19.38 on Nasdaq after the U.S. government accused the chipmaker of illegally using its market dominance to stifle competition.

Honeywell International Inc , the largest maker of cockpit electronics, dropped 2.1 percent to $40.37 after it forecast a drop of 13 percent to 21 percent in net profit next year. It was the biggest drag on the S&P Industrial index <.GSPI>, which slipped 0.3 percent.

Investors, particularly those with significant holdings in banking stocks, also noted the news from Washington that two bills were introduced on Wednesday to reinstate the 1930s-era Glass-Steagall Act to split commercial and investment banking. The proposed legislation is part of an effort in Congress to curb Wall Street's excesses after last year's financial crisis and the meltdown in the stock market.

Volume was light on the New York Stock Exchange, with 1.16 billion shares changing hands, below last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 2.11 billion shares traded, below last year's daily average of 2.28 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 2 to 1, while on the Nasdaq, about 15 stocks rose for every 11 that fell.

(Reporting by Chuck Mikolajczak; Additional reporting by Leah Schnurr; Editing by Jan Paschal)