The minutes, coupled with a jump in gasoline prices, heightened investor worries about inflation and drove an already sagging stock market even lower. Investors are growing increasingly anxious that rates may rise, which could limit corporate profits and consumer spending and further weaken the housing market by making mortgages more expensive.

Wall Street had been hoping instead that the central bank might lower rates because of the slowing economy; the Fed's recent statements accompanying its rate decisions have indicated it was closely watching the economy's direction and leaving open the possibility of a rate cut.

But the minutes released Wednesday showed the Fed was remaining steadfast in its vigilance against inflation. The Fed's Open Market Committee said at its March 20-21 meeting, "all members agreed the statement should indicate that the committee's predominant policy concern remains the risk that inflation will fail to moderate as expected."

Though many investors are still counting on an eventual rate cut, the Fed's tough stance on inflation has made the possibility seem more distant, said Georges Yared, founder and chief investment strategist for Yared Investment Research.

"It's not bad news, but it's not great," Yared said. "The Fed is doing the right thing here, stepping back and putting the brakes on, but not pushing any panic buttons."

The Dow fell 89.23, or 0.71 percent, to 12,484.62, after dropping 118 points earlier in the session. Wednesday's selloff shaved off six sessions' worth of gains, and was the first retreat after eight days of advances, the blue chip index's longest winning streak since 2003.

Broader stock indicators also declined. The Standard & Poor's 500 index slid 9.52, or 0.66 percent, to 1,438.87, and the Nasdaq composite index fell 18.30, or 0.74 percent, to 2,459.31.

Bonds fell after the Fed minutes were released. The yield on the benchmark 10-year Treasury note rose to 4.74 percent from 4.72 percent late Tuesday. The dollar was higher against the euro and the yen, while gold prices were unchanged.

The dollar was helped by comments from Fed Chairman Ben Bernanke, who said after a speech at New York University that China is unlikely to sell off U.S. assets.

Since recent data has suggested slow economic growth and a stable job market, Wall Street's recession jitters have eased and inflation has re-emerged as a big concern. Richmond Fed President Jeffrey Lacker said Wednesday at a speech in Charlotte, N.C., that the rate of inflation, which has registered 2.3 percent over the past 12 months, remains "uncomfortably high" — a phrase contained in the Fed's minutes.

And with energy costs heading upward, investors' hopes for a rate cut by the middle of the year have dwindled. The government on Wednesday reported a 5.5 million-barrel decline in the nation's gasoline inventories, which was four times what the market expected and the ninth straight weekly drop. Crude oil prices rose 12 cents to $62.01 a barrel on the New York Mercantile Exchange, while gasoline futures rose more than 3 cents to $2.1587 a gallon, an eight-month high.

At the retail level, the average U.S. price of a gallon of gasoline was $2.795 on Wednesday, according to AAA, up more than 25 cents from a month ago and 10 cents higher than a year ago.

"Without a doubt, gas prices moving up at the pump is inflationary," said Stephen Carl, principal and head of equity trading at The Williams Capital Group.

In corporate news Wednesday, Citigroup Inc., the nation's largest financial institution, said it would eliminate about 17,000 jobs. But Citigroup's plan to cut about 5 percent of its 327,000-member work force wasn't enough for investors, who had expected a bigger restructuring to slash costs and raise profits. Citigroup fell 60 cents to $51.80.

Wall Street is preparing for next week's flood of earnings data, which it anticipates will show that corporate growth in the first quarter was slower than last year.

Alcoa Inc., the first of the 30 Dow components to report results from the most recent quarter, beat expectations. The aluminum maker rose 18 cents to $35.08 after reporting late Tuesday that its first-quarter profit rose 9 percent.

On Thursday, investors will likely be reacting to quarterly earnings reports from drug maker Genentech Inc. and Blackberry maker Research in Motion Ltd., released after the market closed Wednesday.

Genentech rose 13 cents to $82.69 before reporting that its first-quarter profit soared 68 percent. The stock climbed an additional 36 cents in after-market trading.

But Research in Motion fell $2.29 to $146.02, and dropped another $9.42 in after-market trading after reporting that its first-quarter profit rose but that it is now under a formal Securities and Exchange Commission investigation over its stock option granting practices.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.91 billion shares, up from 2.49 billion Tuesday.

The Russell 2000 index of smaller companies fell 6.27, or 0.77 percent, to 808.24.

Overseas, Japan's Nikkei stock average closed up 0.03 percent. Britain's FTSE 100 edged down 0.07 percent, Germany's DAX index fell 0.19 percent, and France's CAC-40 lost 0.25 percent.

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