After a two-day meeting, the Fed’s Open Market Committee left rates unchanged, maintaining a 45-year low. But in a statement, the central bank dropped its previous wording that rates would be maintained for a "considerable period." Instead, the Fed said, "with inflation quite low ... the committee believes that it can be patient in removing its policy accommodation."

"If you look through all the comments, they continue to describe an improving economy," said Jack Caffrey, vice president and equity strategist at J.P. Morgan Private Bank. "In the intermediate and longer term, this is constructive for equity markets, but short term, I think equity investors are likely to use this as another reason to lock in some of their profits."

According to preliminary calculations, the Dow Jones industrial average finished down 141.55, or 1.3 percent, at 10,468.37, erasing nearly all its gains since the beginning of the year.

Broader stock indicators also fell. The Standard & Poor’s 500 index was down 15.57, or 1.4 percent, at 1,128.48, and the Nasdaq composite index was down 38.67, or 1.8 percent, at 2,077.37.

"The Fed is slowly preparing investors for an increase in rates, but the important thing to remember is that there continues to be a certain amount of slack in the economy, so this is still several months away," said Michael Sheldon, chief market strategist at Spencer Clarke LLC.

With a market fresh off of two months of major gains, Wall Street is primed for at least a pause, if not a pullback, Sheldon said. "It’ll be at least a couple of weeks, though, to see if this will mark a selloff or not," he added.

Stocks were higher earlier despite a Commerce Department report that said orders for durable goods were flat in December, raising questions about the strength of the recovery in the manufacturing sector. Analysts had been expecting a 2 percent increase in orders.

Time Warner posted a profit after a loss a year ago from write-downs on its America Online unit, but the company missed analyst estimates by 1 cent per share. Shares fell 85 cents to $17.96.

Sony’s earnings fell 26 percent from a year ago as the entertainment and technology giant restructures its global operations, but the company gave a strong outlook for its music and consumer technology divisions. Investors responded by sending the stock 19 cents lower to $40.11.

Tenet Healthcare Corp. plummeted $2.95, or 18 percent, to $13.18 as the company announced it would sell one-third of its hospitals.

Procter & Gamble beat estimates by a penny on 22 percent earnings growth, but shares fell 67 cents to $98.51 on a disappointing first-quarter outlook.