* S&P 500 snaps 2-day winning streak
* Fed statement largely as expected
* First Solar jumps after outlook
* Dow off 0.7 pct; S&P 500 down 0.6 pct; Nasdaq off 0.6 pct
(Updates to close)
By Chuck Mikolajczak
NEW YORK, March 19 U.S. stocks fell on Wednesday
after comments from Federal Reserve Chair Janet Yellen raised
the possibility of an earlier- than-anticipated increase in
The central bank dropped the U.S. unemployment rate as its
definitive yardstick for gauging the economy's strength and made
clear it would rely on a wide range of measures in deciding when
to raise interest rates.
Equities extended declines after Fed Chair Janet Yellen said
the "considerable period" between the end of its quantitative
easing program, known as QE, and the first rate increase from
the central bank could be six months.
With QE forecast to wind down sometime near the end of the
year, a six-month lag would move up the timetable for the Fed's
first hike, which many market participants had been expecting in
the second half of 2015.
"She certainly moved it up a little bit, and I don't think
the market was expecting that at all because she is widely
viewed as being more on the dovish side of the aisle than she is
on the hawkish side," said Peter Kenny, CEO of Clearpool Group
in New York.
"That is not a particularly hawkish comment, but the fact of
the matter is, it was not expected."
The Fed also said it would cut its monthly purchases of U.S.
Treasuries and mortgage-backed securities to $55 billion, from
The S&P 500 was within 1 percent of its record closing high,
though economic bellwether FedEx Corp hit a sour note in
its outlook. Geopolitical concerns related to Ukraine also
stayed in focus.
FedEx posted results below expectations and gave a weak
full-year profit forecast, but the package shipper said it had
been significantly hurt by winter storms, and the stock slipped
0.1 percent to close at $138.38.
The Dow Jones industrial average fell 114.02 points
or 0.70 percent, to end at 16,222.17. The S&P 500 slipped
11.48 points or 0.61 percent, to finish at 1,860.77. The Nasdaq
Composite dropped 25.711 points or 0.59 percent, to
close at 4,307.602.
Equities had rallied to start the week, buoyed by easing
geopolitical concerns, though trading volume has been light. The
S&P 500 has climbed 1.7 percent over the previous two
days, the best back-to-back performance for the benchmark index
since early February.
First Solar Inc surged 20.6 percent to $69.40 and
ranked as the S&P 500's best performer after the company
forecast a rise of up to 21 percent in revenue this year. First
Solar also said it was developing cost-effective solar plants
with General Electric Co.
Volume was light, with about 6 billion shares traded on U.S.
exchanges, below the 6.7 billion average so far this month,
according to data from BATS Global Markets.
Volume is expected to surge on Friday as options expiration
takes place alongside multiple index rebalances. Credit Suisse
estimates $14 billion in gross trading will stem from the S&P
500 index rebalance, with another $6 billion coming from
rebalancing in other indexes.
Declining stocks outnumbered advancing ones on the New York
Stock Exchange by a ratio of 3 to 1. On the Nasdaq, nearly two
stocks fell for every one that rose.
(Editing by Jan Paschal)