NEW YORK (TheStreet) -- U.S. stocks tumbled Wednesday after the Federal Reserve said it will reduce its bond-buying by $10 billion, bringing down the size of the economic stimulus program to $65 billion. The decision was unanimous among central bank policymakers.

Investor jitters intensified after the announcement, extending declines among equities, on concerns the U.S. economy isn't yet strong enough to endure a reduction in stimulus at a time when emerging markets have been volatile.

Analysts, however, said strategically the Fed made the right choice.

"I think if they had not tapered it would have opened a bunch of questions on a lot of different fronts," Brad McMillan, chief investment officer for Commonwealth Financial, said in a phone interview. "The fact that they are starting to back off and do it in a disciplined way means that they'll be more effective at guiding the markets with words alone in the future."

Downbeat outlooks from Boeing(BA) - Get Report and AT&T(T) - Get Report further unnerved investors as revenues failed to paint a picture of sustained economic growth.

  • The S&P 500 fell 1.02% to 1,774.20, the Dow Jones Industrial Average lost 1.19% to 15,738.85, and the Nasdaq slipped 1.14% to 4,051.43.
  • The FOMC said that since its December meeting, data has shown that labor market indicators were mixed but showed further improvement on balance. The unemployment rate declined but remained elevated.
  • The Fed made no references to volatility in the emerging markets even as the U.S. and international markets continue to be roiled by concerns about massive liquidity outflows from the EMs, China's growth and its financial sector, and local-specific political issues.
  • Bloomberg data shows a more than $995 billion reduction in the value of emerging-market (EM) equities since the Fed began hinting at tapering in May.
  • The FTSE 100 closed 0.43% lower while the DAX in Germany declined 0.75% as U.S. stocks sank, even with currency intervention efforts by Turkey's central bank, which hiked rates sharply. The South African central bank also tightened rates to preserve the value of its currency.
  • McCormick(MKC) - Get Report dropped 6.2% after giving weaker-than-estimated fiscal 2014 revenue and EPS guidance due to an increase in marketing costs and expectations of slower growth at its U.S. businesses.
  • Both Boeing and AT&T fell after their quarterly forecasts failed to meet estimates. Shares in the plane-maker and mobile company fell by 5.3% and 1.2%, respectively. Yahoo (YHOO)  shed 8.7% after it forecast slowing growth. Dow Chemical(DOW) - Get Report gained 3.9% after lifting its dividend and share-buyback plan.
  • Tupperware Brands(TUP) - Get Report declined 5.5% to $79.18 after guiding full-year and first-quarter revenue and EPS below the consensus.

-- Written by Andrea Tse and Joe Deaux in New York