Stocks continued to slide Wednesday after the Fed left the "extended period" language in their statement, referring to how long they will leave interest rates low.
Stocks had already been trading lower after some disappointing earnings outlooks.
Adding extra pressure, a report showed new home sales unexpectedly unexpectedly fell 7.6 percentin December, an improvement from November but short of expectations, and the House put Treasury Secretary Geithner and and former Treasury Secretary Paulson on the hot seat over the AIG bailout. (Watch the live streaming video.)
It will be a busy day in Washington: In additon to the Fed statement and AIG hearing, the President Obama gives his first State of the Union address tonight. Obama's focus is expected to be jobs the and the economy amid recent criticism that he's spent too much time on health-care reform.
Oil moved toward $75 a barrelahead of the EIA's weekly crude oil inventory report.
A $42 billion auction of five year notes today came in at a high yield of 2.375 and a bid-to-cover ratio of 2.80.
Apple shares rallied after CEO Steve Jobs announced aggressive pricing for the new iPad tablet computer: It will start at just $499 and an unlimited data deal with AT&T is $29.99 a month. The stock had been down about 2 percent when Apple first annonced the iPad but turned higher after the pricing news.
It looks like a giant iPhone and features YouTube in high-def, as a way to watch TV and movies, and a Google map built in, among the other interesting features. The company didn't disclose the price or when it would be available. (Read Jim Goldman's live blog of the event.)
Disney isrumored to be getting in on the iPad actionbut no official word has come yet from either company.
In the latest round of earnings, companies continued to beat expectations but several tempered their full-year outlooks, perhaps as a measure to dampen Wall Street's inflated expectations.
Heavy-equipment maker Caterpillar beat analyst estimates on the bottom line, but issued a weak 2010 outlook.
Aerospace giant Boeing swung to a profit and beat expectations with its quarterly numbers but fell short with its full-year forecast.
United Technologies also topped forecasts but the company, which makes everything from elevators to air conditioners, said it expects domestic commercial construction activity to remain weak. That may be partially offset by growth in China.
Apple will unveil its long-anticipated tablet computer at an event in San Francisco later today, complete with the usual Apple fanfare that surrounds a new product introduction.
Yahoo late Thursday hit its earnings targets and said it may see revenue growth in the first quarter, which would be the first time in six quarters.
After the bell today, we'll get earnings from Qualcomm.
Banks bounced back at the open after a late selloff Tuesday amid worries about Washington's crackdown on the sector ahead of the State of the Union tonight and a hearing next week on Capitol Hill.
The Senate set a vote for Thursday on Fed Chairman Ben Bernanke's confirmation.
In a turn of events in the auto industry, this time it's a Japanese car maker that's in trouble: Toyota is suspending sales of about 57 percent of its new cars and shutting down production on eight models due to a flaw that may cause sudden acceleration. The models involved are the RAV4, Corolla, Matrix, Avalon, Camry, Highlander, Tundra, and Sequoia.
Toyota's U.S.-traded shares skidded, while the news gave a boost to shares of American rival Ford.