By Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks were down as much as 1 percent in volatile trading on Wednesday following the Federal Reserve's decision to further reduce its monthly bond purchases.
Indexes added to losses as investors digested the Fed's announcement to cut a further $10 billion from its monthly bond purchases, sticking to its plan to scale back stimulus despite recent turmoil in emerging markets.
"This was pretty much as expected," said Wayne Kaufman, chief market analyst at Rockwell Securities in New York. "Ten billion more in tapering, but the Fed is still doing tremendous amounts of asset purchasing."
Stocks had been lower ahead of the announcement amid concerns that bold efforts by Turkey and South Africa to stabilize their currencies may not be enough to staunch a cycle of selling in emerging markets.
The benchmark S&P 500 has lost ground in four of the past five sessions amid fears over slowing growth in China and large capital outflows from developing markets as investors sought safe-haven assets.
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Selling was fairly broad-based, with nine of the 10 S&P 500 sectors trading lower and shares of Boeing Inc among the biggest drags. The stock fell 6 percent to $128.91, even as it reported a 26-jump in quarterly profit.
The Dow Jones industrial average fell 164.72 points or 1.03 percent, to 15,763.84, the S&P 500 lost 15.13 points or 0.84 percent, to 1,777.37 and the Nasdaq Composite dropped 37.182 points or 0.91 percent, to 4,060.781.
South Africa's central bank raised interest rates for the first time in six years. This followed a dramatic rate hike by Turkey's central bank, designed to defend its crumbling currency.
Yahoo shares were also down sharply, falling 8 percent to $35.17 after reporting results late Tuesday.
(Additional reporting by Ryan Vlastelica; Editing by Bernadette Baum and Nick Zieminski)