The moderate pace of the reduction in the Fed's bond purchases was also encouraging. "It was not too hot and not too cold," Weigand said.
In government bond trading, the yield on the 10-year Treasury note rose to 2.93 percent from 2.89 percent late Wednesday. The yield climbs when bond prices fall. Demand for bonds was lower Thursday as traders anticipated less buying from the Fed.
The rise in yields also hit the stocks of power companies.
Utilities companies fell the most of the 10 industry sectors that make up the S&P 500. Investors buy utility stocks because they pay big dividends. As bond yields rise, those stocks become less attractive.
The price of gold dropped $41.40, or 3.4 percent, to close at $1,193.60 an ounce. Gold hadn't settled below $1,200 an ounce in more than three years.
Investors are dumping their holdings of gold because interest rates are rising and the dollar is gaining after the Fed said it would pare back its bond purchases. Traders are selling gold because they see less risk of inflation from the Fed's stimulus program.
Among other stocks making big moves:
— Oracle jumped $2, or 6 percent, $36.60 after its earnings beat Wall Street forecasts. The business software maker earned $2.55 billion, or 56 cents per share. Revenue rose 2 percent to $9.28 billion from $9.09 billion.
— Darden Restaurants slumped $1.90, or 4 percent, to $51.02 after the restaurant company said it will spin off its Red Lobster chain and not open any new Olive Gardens.