NEW YORK (TheStreet) -- Stocks dropped to session lows by mid-afternoon Wednesday as markets weighed comments from Federal Reserve Chair Janet Yellen that warned of potentially overstretched equity valuations.
Equities also were under pressure as weaker private payrolls numbers from ADP triggered fears ahead of the official U.S. jobs report on Friday and amid a global selloff of government bonds.
The S&P 500 was down 1%, the Dow fell 1%, and the Nasdaq slid 1%.
Yellen said market valuations were "generally quite high," though noted the Fed was not seeing signs of a bubble. Yellen's comments came in a joint appearance with International Monetary Fund managing director, Christine Lagarde, at a conference in Washington.
Separately, Atlanta Fed President told an audience in Baton Rouge, La., that he was not "overly concerned" with weakness in the first quarter which saw the U.S. economy expand at a rate of just 0.2%.
"I am not taking much of a signal from the first quarter in my forecast for the second quarter and the rest of the year," he said, noting that the dollar and oil have stabilized in recent weeks, which should cause less of a drag on the economy.
Herbalife (HLF) surged nearly 20% after earning $1.29 a share in its recent quarter, rocketing past estimates of $1.01. Sales were down nearly 13% to $1.11 billion, though beat forecasts of $1.09 billion. The nutrition company has been under pressure since hedge fund investor Bill Ackman accused it of operating a pyramid scheme.