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New York - US stocks dropped after Federal Reserve Chair Janet Yellen offered a rough time-table for when the central bank could raise benchmark interest rates.
The Dow Jones Industrial Average slid 114.02 points (0.70 percent) to 16,222.17.
The broad-based S&P 500 fell 11.48 (0.61 percent) to 1,860.77, while the tech-rich Nasdaq Composite Index declined 25.71 (0.59 percent) to 4,307.60.
Stocks did not move significantly after the Fed's initial policy announcement at 1800 GMT, which, as expected, continued a plan to trim back stimulus.
But a remark from Yellen during a news conference rattled markets, sending the Dow as low as 16,126.29 before stocks pared losses.
Yellen said the time-frame for raising interest rates could be "on the order of around six months" after the stimulus ends, expected at its current taper pace by year-end.
Michael James, managing director of equity trading at Wedbush Securities, said the time-frame suggested the shift from an era of extremely low rates would come "sooner than the market had been expecting."
But Hugh Johnson of Hugh Johnson Advisors said the market misinterpreted the remark.
"The knee-jerk response of the markets was an overreaction," Johnson said.
The sell-off eased when markets concluded "that she didn't say anything that was significantly different from what the market expected," Johnson said.
First Solar shot up 20.6 percent on a forecast of higher sales. Net sales could get as high as $4 billion in 2014, $4.3 billion in 2015 and $4.5 billion in 2016.
General Mills advanced 0.1 percent following mixed financial results. The company said earnings met expectations, but revenues of $4.38 billion lagged the $4.41 billion expected by analysts. The food company said severe winter weather depressed results.
Software giant Oracle fell 0.8 percent after earnings of 68 cents per share missed estimates of 70 cents per share.
Dow member JPMorgan Chase announced a $3.5 billion agreement to sell its commodities business to Mercuria Energy Group Limited, a Swiss trading firm. JPMorgan shares rose 0.4 percent.
Builder KB Home surged 5.9 percent as it reported a 21 percent rise in potential future housing revenues from orders to $851.6 million. The company also reported net income of $10.6 million, compared with a loss of $12.5 million in the year-ago period.
Bond prices fell. The yield on the 10-year US Treasury jumped to 2.77 percent from 2.68 percent on Tuesday, while the 30-year rose to 3.67 percent from 3.63 percent. Bond prices and yields move inversely.
