Wall Street closes lower on Fed

United States stocks closed sharply lower after the Federal Reserve announced another reduction in its monthly bond purchases, as expected and offered a rough timetable for when the central bank could raise benchmark interest rates.

At the closing bell, the Dow Jones Industrial Average turned lower, lost 114.02 points, or 0.7%, to 16,222.17 points

The S&P 500 index slipped 11.48 points, or 0.61%, to 1,860.77 and the Nasdaq Composite Index slipped 25.71 points, or 0.59%, to 4,307.60.

Stocks did not move significantly after the Fed's initial policy announcement, which, as expected, continued a plan to trim back stimulus.

But a remark from Fed chair Janet Yellen during a news conference rattled markets, sending the Dow as low as 16,336.19 before stocks pared losses.

Ms Yellen said the timeframe for raising interest rates could be "on the order of around six months" after the stimulus ends.

Michael James, managing director of equity trading at Wedbush Securities, said the timeframe suggested the shift from an era of extremely low rates would come "sooner than the market had been expecting."

But Hugh Johnson of Hugh Johnson Advisors said the market misinterpreted the remark.

"The knee-jerk response of the markets was an overreaction," Mr Johnson said.

The sell-off eased when markets concluded "that she didn't say anything that was significantly different from what the market expected."