Stocks drop as earnings disappoint; Fed upcoming

New York • Disappointing earnings from big U.S. companies and more unsettling developments in emerging markets pushed U.S. stocks lower Wednesday.

Investors are also waiting for the Federal Reserve to wrap up a two-day meeting later, when it is expected to announce that it will keep dialing back stimulus for the economy.

KEEPING SCORE: The Dow Jones industrial average fell 134 points, or 0.8 percent, to 15,794 as of 12:57 p.m. Eastern Time. The Standard & Poor's 500 index lost ten points, or 0.6 percent, to 1,781. The Nasdaq composite fell 24 points, or 0.6 percent, to 4,073.

EARLY STUMBLE: The S&P 500 index has fallen 3.6 percent this month, putting it on track for its biggest monthly decline since May 2012. That's a big contrast from last year, when the S&P 500 index rose 5 percent in January. The index ended the year up nearly 30 percent, its best performance since 1997.

FED DAY: The Fed end its two-day policy meeting later Wednesday and is expected to continue reducing, or "tapering," its bond purchases to $65 billion a month from $75 billion a month. The policy is intended to boost the economy by holding down long-term interest rates and encourage borrowing and hiring.

The recent volatility in global stock markets is unlikely to deter the Fed from cutting their stimulus, said Lawrence Creatura, a portfolio manager at Federated Investors.

"It's not the Fed's responsibility to take care of the stock market," said Creatura. "Employment and inflation are their only focus."

LIRA TODAY, GONE TOMORROW: The Turkish lira has been at the center of an emerging-market sell-off that prompted jitters in global stock markets over the past week. The currency surged against the U.S. dollar late Tuesday after Turkey's central bank raised its benchmark lending rate to fight rising inflation.

The lira traded at 2.24 per dollar on Wednesday, about where it was before the central bank raised interest rates.

South Africa also raised its interest rates Wednesday but the move failed to shore up its currency. The South African rand dropped 2.8 percent against the dollar to trade at 11.24 rand per dollar.

THE BIGGER PICTURE: The S&P 500 has dropped 3.4 percent since the emerging market jitters first surfaced last Thursday. A survey showed that manufacturing in China, the world's second-biggest economy, was slowing in January. Stocks have extended their declines as emerging market currencies including the Turkish lira, the Argentinian peso and the South African rand have been battered in recent days.

NOT GOOGLE: Yahoo fell $2.80, or 7.4 percent, to $35.42 after the internet company reported a drop in fourth-quarter revenue late Tuesday, highlighting its trouble attracting online advertising dollars. Yahoo reported a 6 percent decline in revenue, the same rate of decline for all of 2013.

PLANE DISAPPOINTEMENT: Boeing fell $8.01, or 5.8 percent, to $129.08 after the plane maker said that 2014 revenue and profit would fall short of analysts' expectations as the pace of orders slows.

PHONING IT IN: AT&T, the nation's biggest telecommunications company, fell 65 cents, or 2 percent, to $33.05 after its outlook for the year disappointed investors. The phone company said its forecast "assumes no lift from the economy," and forecast earnings in the mid-single digit range.

AMONG THE WINNERS: Dow Chemical rose $1.65, or 3.8 percent, to $44.70 after the company increased its quarterly dividend and expanded its share-purchase program.

TREASURYS AND COMMODITIES: Bond prices rose. The yield on the 10-year Treasury note fell to 2.71 percent from 2.75 percent. The price of oil fell 40 cents, or 0.4 percent, to $97.01 a barrel. Gold rose $11.30, or 0.9 percent, to $1,262.10 an ounce