NEW YORK (TheStreet) -- The S&P 500 slid into the red shortly after the Federal Reserve reiterated its pledge to remain "patient" in normalizing policy, echoing its previous statement a month earlier. The announcement came with with no accompanying press release, leaving investors to comb the wording for clues as to when a rate hike could occur.
"From the equity market perspective, this might be the least helpful the Fed has been," said Brean Capital's Peter Tchir. "They didn't even find a way to work 'considerable' language into this."
Few economists expected any significant change in tone this month, particularly after Fed Chair Janet Yellen told investors in December that policy would remain unchanged until at least a couple of meetings.
But rather than celebrating the Fed kicking the rate hike can a little further down the road, the announcement's vagueness has spooked Wall Street.
"You have a glass half-empty reaction on the stock market," said George Rusnak, co-head of global fixed income for Wells Fargo Investment Institute. "The stock market, as much as it likes potentially pushing off interest rate rises, also realizes if [the Fed is] going to do that they're doing that for a reason. The reasons would typically be either signals of slowing growth or potential fears over disinflation."
The S&P 500 fell 0.64%, and the Nasdaq dropped 0.21%. The Dow Jones Industrial Average was down 0.4%.
Crude oil prices slipped on Wednesday as U.S. inventories increased 8.9 million barrels over the week, nearly double estimates of 4.6 million barrels. West Texas Intermediate crude dropped 4.6% to $44.12 a barrel.
Goldman Sachs warned commodities will lag equities and bonds over the next three months. The bank slashed its outlook on raw materials to "underweight," with expectations of a 10% loss compared to a 0.4% gain for stocks.
"Despite the large declines in commodity prices, we see risks still skewed to the downside over the near term," Goldman analysts wrote in a report.
Exxon Mobil (XOM) , Chevron (CVX) , Anadarko Petroleum (APC) and Halliburton (HAL) extended losses despite the Fed referring to lower energy prices as "transitory" in its announcement. The Energy Select Sector SPDR ETF (XLE) dropped 3.4%.
Solid earnings from Apple (AAPL) and Yahoo! (YHOO) were a welcome relief after stocks suffered their worst day in three weeks on Tuesday following weak results from multinational companies such as Procter & Gamble (PG) and Caterpillar (CAT) .
"While the United States is not an export-driven economy, many of its largest companies rely heavily on outside markets and they will inevitably be hurt by a stronger dollar and global stagnation," noted CRT Capital Group's Ian Lyngen.
The earnings season has been healthy so far, despite the series of earnings disappointments on Tuesday that might have suggested otherwise. Of the nearly one-third of companies that have reported, 70.3% have exceeded analysts' earnings forecasts, according to Thomson Reuters. On average, during any given earnings season, 63% of companies will top expectations.
Apple shares soared more than 6% after fiscal first-quarter earnings of $3.06 a share rocketed past expectations by 45 cents. Sales jumped nearly 30% following a surge in iPhone sales, its best-selling product.
Yahoo! narrowly beat fourth-quarter forecasts. Management also announced it had authorized the tax-free spinoff of its remaining stake in Alibaba (BABA) . Yahoo! currently holds a 15% position, worth $39.5 billion.
Boeing (BA) gained 5.9% as quarterly core earnings of $2.31 a share surpassed forecasts by 20 cents. Sales of commercial airplanes jumped 15%in the fourth quarter.
Semiconductor company Freescale (FSL) rallied 18.1% after reporting quarterly profit above consensus and guiding for first-quarter revenue as high as $1.185 billion, exceeding forecasts of $1.11 billion.
Hess (HES) disappointed, posting a loss of 3 cents a share compared to profit of $5.76 a share a year earlier. The oil and gas refinery was hit hard by plummeting oil prices over the past six months. Shares tumbled 6.7%.
Sony (SNE) added more than 2% on reports the company plans to cut an additional 1,000 jobs in its smartphone division on top of 1,000 cuts already announced in October.
Ulta Petroleum (UPL) tanked 8.8% after Goldman Sachs analysts downgraded the stock to "sell," slashing its price target to $2 from $11. The firm said the downgrade was due to deflationary pressures in oil.
-- Written by Keris Alison Lahiff in New York.