Stocks fell on Wednesday after Federal Reserve Chairman Ben Bernanke's comments on how the central bank could exit extraordinary stimulus measures turned investors jittery about the economy's recovery.
In remarks prepared for a hearing of the House of Representatives Financial Services Committee, Bernanke outlined potential exit strategies, including removing some cash from the financial system. He also reiterated the economy would still need very low interest rates for a long time.
Low volume made the market more susceptible to large movements, with some players absent because of the heavy snowfall in the U.S. East Coast.
The market is a little apprehensive about what the next step is and how the markets will react to a lower level of activity on the part of the Fed in order to support liquidity, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
Focus was also on intensive talks being held by euro zone countries on a possible rescue for debt-laden Greece. However, European Union law offers no clear procedure for such a bailout, and investors scrutinized various comments and reports for details.
Shares of Sprint Nextel Corp
The Dow Jones industrial average <.DJI> fell 87.07 points, or 0.87 percent, to 9,971.57. The Standard & Poor's 500 Index <.SPX> dropped 10.62 points, or 0.99 percent, to 1,059.90. The Nasdaq Composite Index <.IXIC> lost 18.32 points, or 0.85 percent, to 2,132.55.
(Reporting by Leah Schnurr, additional reporting by Ellis Mnyandu; Editing by Padraic Cassidy)