NEW YORK ( TheStreet) -- Stocks finished sharply lower Wednesday after the Federal Reserve announced its widely anticipated "Operation Twist" strategy and used its policy statement to signal deepening concerns about the health of the economy.
The three major averages reacted negatively on the news, with the selloff deepening minutes before the close. The Dow Jones Industrial Average saw a triple digit decline, falling 284 points, or 2.5%, to close at 11,123. The S&P 500 lost 35 points, or 3%, to settle at 1167, and the Nasdaq, in the green before the announcement, plunged 52 points, or 2%, at finish at 2538.
|Federal Reserve Chairman Ben Bernanke|
Negative corporate news also was pressuring the market Wednesday. Earlier, Moody's Investors downgraded Bank of America (BAC - Get Report) debt by two notches to Baa1, still above junk territory, causing shares of the company to fall 7.5% to $6.38. The ratings agency cited an increased probability that the government would allow the bank to fail compared to during the financial crisis. Bank of America (BAC - Get Report), JPMorgan Chase (JPM) and Caterpillar (CAT) plunged to the bottom of the Dow. Materials, transportation and capital goods stocks put the most pressure on U.S. indices. Also pulling down stocks were coal producers that lowered their outlooks for 2011. Metallurgical coal producer Walter Energy (WLT) said it anticipates a delay in its projected production growth, sending shares down 11.7% to $66.25. Meanwhile, coal producer Alpha Natural Resources (ANR) which lowered its full-year shipment guidance, fell 17.1% to $22.30. Technology was the session's bright spot with Hewlett-Packard (UTX), IBM (HPQ) and Intel (INTC) surging to the top of the Dow. Helping the tech sector was Oracle (ORCL), whose shares advanced 4.2% to $29.54 after the database software maker reported better-than-expected first-quarter results with earnings of 48 cents a share on sales of $8.43 billion. Market breadth was to the negative, with about 80% of the 4.9 billion shares trading on the New York Stock Exchange declining and 17% rising. Some 2.1 billion stocks changed hands on the Nasdaq.