EW YORK (AP) -- Stocks closed lower after the Federal Reserve said it would cut back further on its economic stimulus. The central bank and its newly installed Chair Janet Yellen also suggested the Fed was moving closer to raising interest rates.
The Standard & Poor's 500 index fell 11 points, or 0.6 percent, to close at 1,860 Wednesday.
The Dow Jones industrial average dropped lost 114 points, or 0.6 percent, to 16,222. The Dow was down as much as 209 points earlier.
The Nasdaq composite fell 25 points, or 0.6 percent, to 4,307.
Financial stocks including Bank of America rose as investors anticipated higher interest rates would mean higher earnings from lending at major banks.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.77 percent from 2.67 percent.