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Markets had a muted reaction to the Federal Reserve's announcement it would stick to its plan to buy $85 billion in bonds each month to keep borrowing costs low and to prop up the economy, a move that was widely expected.
US Treasury yields edged up from four-month lows after the Fed statement, while the dollar briefly rose against the yen.
The Fed cited risks to the economy from recent budget tightening in Washington.
"That the Fed won't end QE (quantitative easing) any time soon is positive for stocks in the near term, but the data we've seen is creating a lot of angst for investors," said Mike Gibbs, co-head of the equity advisory group at Raymond James in Memphis, Tennessee.
Among the latest pieces of evidence to suggest slower US economic growth, payrolls processor ADP reported Wednesday that private employers added 119,000 jobs in April, well below economists' expectations for 150,000 new jobs. A separate report from the Institute for Supply Management showed the US manufacturing sector expanded only modestly in April.
Also, growth in China's factory sector unexpectedly slowed last month as new export orders fell, raising fresh doubts about the world's second-largest economy after a disappointing first quarter.
The Dow Jones industrial average fell 138.85 points, or 0.94%, to end at 14,700.95. The Standard & Poor's 500 Index was down 14.87 points, or 0.93%, at 1,582.70. The Nasdaq Composite Index was down 29.66 points, or 0.89%, at 3,299.13.
The S&P 500 hit intraday and closing record highs on Tuesday.
MSCI's world equity index was down 0.6%, while Britain's FTSE 100 was up 0.3%, led by gains in banks on expectations of further monetary easing by the European Central Bank when it meets on Thursday. The Paris and Frankfurt stock markets were closed for the May Day holiday.
Data showing US crude oil inventory rose to a record level also weighed on oil prices. Brent crude futures fell $2.42 to settle at $99.95 a barrel. US oil dropped $2.43 to settle at $91.03.
"The market reared its head after we saw oil stocks jump to a three-decade high, and gasoline demand basically dropped to a decade low," said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.
Dollar weakens
The US dollar was last down 0.06% to trade at 97.35 yen after briefly trading higher. The euro was up 0.2% against the dollar at $1.3186.
Some investors in recent weeks thought the Fed might start scaling back asset purchases.
"The talk of tapering (bond purchases) has not only been pushed to the back burner but pushed off the stove altogether. It's not something we're likely to see until 2014," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
The ECB is expected to cut its main interest rate to a record low of 0.5%.
Economists are eyeing whether the ECB can do more. The central bank lacks the aggressive policies many of its major peers are using, and the mismatch in approaches, as well as the dollar's weakness, have kept upward pressure on the euro.
In the US bond market, benchmark 10-year Treasuries were last up 11/32 in price to yield 1.637%, after falling as low as 1.614% before the Fed statement, the lowest since December. Yields have dropped from around 1.67% earlier on Wednesday.
Gold, Copper also sell off
Copper slid on concerns over growth in top metal consumer China. Benchmark copper was down 3.6% at $6,795.15 per tonne after trading close to the 18-month lows hit last week.
Gold prices slid more than 1% lower, the biggest daily drop since bullion's historic decline in mid-April, although the metal pared some losses after the Fed stuck to its monetary stimulus plan.
Spot gold was down 1.3% at $1,457.90 an ounce.
