NEW YORK (AP) — Stock investors had plenty to dislike on Wednesday.
Disappointing earnings from big U.S. companies, ongoing jitters in emerging markets and more cuts to the Federal Reserve's economic stimulus combined to push stocks lower for the fourth day out of the last five.
Boeing slumped after the plane maker said its 2014 revenue and profit would fall short of analysts' expectations as its defense business slows and it delivers more of its 787 planes, which are less profitable. AT&T, the largest U.S. telecommunications company, fell after its outlook for the year disappointed investors.
Currencies including the Turkish lira and the South African rand fell against the dollar despite efforts by central banks in those countries to stem the declines by raising interest rates. Investors say those tighter credit policies, which can restrict lending, come with risks.
"If the central banks out there continue to hike interest rates, they are going to destroy economic activity," said Peter Cardillo, chief market economist at Rockwell Global Capital. "That will impact the global economy as well."
The Standard & Poor's 500 index fell 18.30 points, or 1 percent, to 1,774.20. The Dow Jones industrial average fell 189.77 points, or 1.2 percent, to 15,738.79. The Nasdaq composite dropped 46.53 points, or 1.1 percent, to 4,051.43.
Stocks opened lower in response to the lackluster earnings news. The market added to its declines after the Fed's announcement at 2 p.m. Eastern time.
The Fed said it will lower its monthly bond purchases by $10 billion to $65 billion because of a strengthening U.S. economy. The Fed is cutting back its bond purchases, which have held down long-term interest rates, even though the prospect of reduced stimulus has rattled global markets. The move was largely anticipated by analysts and investors.
Investors should view the Fed's move as a vote of confidence in the economy because it means the central bank sees the recovery as more entrenched, said Dan Genter, chief investment officer at RNC Genter Capital Management.
Fed policymakers are "not seeing enough bad news to stop that process, which should be viewed as a positive."
The S&P 500 has dropped nearly 4 percent since concerns about developing the emerging market jitters first surfaced last Thursday. That's when a survey showed that manufacturing in China, the world's second-biggest economy, was slowing in January.
Stocks have extended their declines as emerging market currencies have been battered in recent days. .
The Turkish lira has been at the center of an emerging-market sell-off that prompted jitters in global stock markets over the past week.
The currency surged against the U.S. dollar late Tuesday after Turkey's central bank raised its benchmark lending rate to fight rising inflation.
However, the lira traded at 2.26 to the U.S. dollar on Wednesday afternoon, slightly lower than it was before the central bank raised interest rates.