Stocks trimmed losses on Tuesday after the Federal Reserve said the economic recovery is on a firmer footing and conditions in the labor market appear to be improving gradually.

The Dow Jones industrial average dropped 140.28 points, or 1.17 percent, to 11,852.88. The Standard & Poor's 500 Index fell 14.93 points, or 1.15 percent, to 1,281.46. The Nasdaq Composite Index shed 35.12 points, or 1.30 percent, to 2,665.85.

Earlier in the session, the Dow and S&P fell more than 2 percent and the Nasdaq dropped 3 percent.