Stocks Get Roughed Up

Updated from 4:10 p.m. EST

Troubling comments from a Federal Reserve official, weak earnings and a plummeting dollar pushed stocks in the U.S. deep into the red Wednesday.

The Dow Jones Industrial Average sank 360.92 points, or 2.64%, to 13,300.02. The S&P 500 plunged 44.65 points, or 2.94%, at 1475.62, and the Nasdaq Composite tumbled 76.42 points, or 2.7%, at 2748.76.

"This was a confluence of oil, subprime and dollar fears all hitting the market at once," said Paul Nolte, director of investments with Hinsdale Associates. "These factors have all been there, but this is the first day they've all been front and center. It seems no one wanted to hold anything overnight, which is why we had this late-session selloff."

The major averages fell to their worst levels of the day after St. Louis Fed President William Poole said that the central bank will not raise interest rates when it meets Dec. 11. Investors took Poole's comments as a sign that the Fed believes recent credit problems will persist.

"Market participants must be confident that they can take positions without the risk that the Fed might raise rates," said Poole during a speech in Milwaukee. "Barring unusual circumstances, the [Federal Open Market Committee] would not consider a rate increase just after cutting its fed funds rate target."

Poole added that "the Fed needs to be careful to do what is necessary, but not more."