Investing.com -- U.S. stocks fell sharply in Wednesday's session, reversing territory after the Federal Reserve held interest rates steady at its January monetary policy meeting, while offering little direction on the timing of its next hike.
In the face of weak inflation and slow global economic growth, the Federal Open Market Committee left its benchmark Federal Funds Rate at its current level between 0.25 and 0.50% on Wednesday. Strikingly, the FOMC admitted that inflation remains well-below its target goal of 2%, by removing language that inflationary pressures could reach the objective in the near term future. The removal underscores concerns related to the downturn in oil prices and slumping imports.
It came one month after the Fed ended a seven-year zero interest rate policy by approving its first rate hike in nearly a decade.
Analysts appeared divided on whether the statement indicates that the Fed could be leaning toward a subsequent rate hike in March or if the U.S. central bank could delay further tightening measures beyond the first quarter. The decision, according to the Fed's statement, will hinge on evolving labor market conditions, inflation expectations and developments in the global financial markets.
"The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run," the FOMC said in its statement released on Wednesday.
The Dow Jones Industrial Average fell by 222.77 or 1.38% to 15,944.46, while the NASDAQ Composite index lost 99.50 or 2.18% to 4,468.17. The S&P 500 Composite index, meanwhile, dropped 20.68 or 1.09% to 1,882.95, as eight of 10 sectors closed in the red. Stocks in the Technology, Consumer Services and Health Care industries lagged, each falling more than 1% on the session.
The Dow and S&P 500 were both slightly positive minutes before the release, while the NASDAQ lagged behind in negative territory.
Heavy losses among Apple Inc (O:AAPL) and Boeing Company (N:BA) weighed on the Dow throughout the session. Shares in Apple fell 6.36% to 93.63%, one day after the world's largest company reported the slowest annual pace in iPhone sales growth in the history of the device. Analysts at UBS now expect iPhone revenues to tumble by as much as 15% in the second quarter.
Boeing, the Dow's worst performer, plunged 11.46 or 8.95% to 116.55, after offering a disappointing outlook for its production of new planes. By 2017, Boeing expects to roll out an average of 7.0 new 777 planes per month, down from current levels around 8.3. The top performer was VZ Holding AG (VX:VZN), which added 0.72 or 1.49% to 48.97.
The biggest gainer on the NASDAQ was Biogen Inc (O:BIIB), which surged 14.13 or 5.44% to 274.00, after topping analysts' estimates with its earnings and revenues during its fourth quarter of 2015. Driven by strong sales with its multiple sclerosis drug Tecfidera, the Cambridge, Massachusetts-based pharmaceutical company reported per share earnings of 4.50, considerably above forecasts of 4.08. The worst performer was Biomarin Pharmaceutical Inc (O:BMRN), which fell 6.28 or 7.30% to 79.76.
The top performer on the S&P 500 was Freeport-McMoran Copper & Gold Inc (N:FCX), which soared 0.45 or 10.71% to 4.65, after the Wall Street Journal reported the Phoenix-based company plans to enhance its debt-reduction capablities in an effort to become more attractive for a potential merger. Analysts could shift their outlook on one of the world's top mining companies, after Freeport-McMoran reported smaller than expected losses on Tuesday with its quarterly earnings.
The worst performer was Total System Services Inc (N:TSS), which lost 6.78 or 14.74% to 39.22 after the company announced it would acquire TransFirst from Vista Equity Partners in a $2.35 billion all cash deal. The merger came on the heels of worse than expected earnings from the credit card processor.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 1,892-1,148 margin.