Wall Street Gets Whacked

Breadth was markedly weaker. On the New York Stock Exchange 3.31 billion shares changed hands, as decliners trounced advancers by a 7-to-1 margin. Volume on the Nasdaq reached 2.52 billion shares, with losers beating winners 5 to 1.

Last time out, stocks surged following the Fed's decision to trim 25 basis points off the fed funds rate. The Dow seesawed during the session, but when the final bell rang, it had a gain of 137.54 points, or 1%, at 13,930.01.

The S&P 500 jumped 18.36 points, or 1.2%, to 1549.38, and the Nasdaq was better by 42.41 points, or 1.51%, at 2859.12.

"Looking at this decline, it's a little bit overdone," Robert Pavlik, chief investment officer with Oaktree Asset Management, said earlier. "Even though the Fed hasn't indicated any chance of another rate cut, they're willing to step in if the economy needs it. The hawkish statement that accompanied the Fed cut yesterday is now the focus, while the Citigroup and Exxon news certainly isn't helping."

Art Hogan, chief market analyst with Jefferies, said the pullback should be viewed as a typical hangover following a Fed interest rate decision.

"We had our celebration, but we forgot the Fed shifted their balance," said Hogan. "The guaranteed rate cut is gone, and investors are now looking at the news differently. If you drill down deeper into the Fed's statement and look at what's been affecting the market, there's more bad news than good news, and that's why we have this move today."