* Fed to reduce stimulus by another $10 billion per month
* South Africa raises rates for first time in 6 years
* Boeing, Yahoo fall after results
* Dow down 1.2 pct; S&P 500 down 1 pct; Nasdaq off 1.1 pct
By Caroline Valetkevitch
NEW YORK, Jan 29 U.S. stocks accelerated their
selloff in volatile trading on Wednesday after the Federal
Reserve decided to further reduce its monthly bond purchases
despite recent emerging market turmoil.
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 Fed stuck to its plan to scale back stimulus, announcing
a further $10 billion reduction in its monthly bond purchases.
Overall signs of improvement in the U.S. economy suggested
that policymakers would continue to cut the purchases, but some
investors had speculated in recent days the Fed might rethink
their plan because of the emerging market problems.
"I think investors had hoped that the Fed would somehow
respond to the recent turbulence and show they had their back,"
said Jack Ablin, chief investment officer of BMO Private Bank in
The Fed said it would buy $65 billion in bonds per month
starting in February, down from $75 billion now. In what was Fed
Chairman Ben Bernanke's last policy-setting meeting, the central
bank also maintained its longer-term plan to keep U.S. interest
rates low for some time to come.
The Dow Jones industrial average fell 182.51 points
or 1.15 percent, to 15,746.05. The S&P 500 lost 17.61
points or 0.98 percent, to 1,774.89. The Nasdaq Composite
dropped 44.962 points or 1.1 percent, to 4,053.
Shares of Boeing Co ranked among the biggest drags on
both the Dow and the S&P 500. The stock fell 6 percent to
$128.90, though it reported a jump in quarterly profit.
Yahoo shares slid 8.2 percent to $35.09 after
reporting results late Tuesday.
Most of the S&P 500's 10 sector indexes also declined.
The benchmark S&P 500 has lost ground in four of the past
five sessions as fears over slowing growth in China and large
capital outflows from developing markets prompted investors to
seek safe-haven assets.
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