Stocks ended lower in volatile trading Thursday after Fed Chairman Ben Bernanke failed to provide additional detail on how to boost the weakening U.S. economy and as investors looked ahead to President Obama's jobs speech later this evening.
The Dow Jones Industrial Average fell 119.05 points, or 1.04 percent, to close at 11,295.81, led by JPMorgan and BofA .
Cisco led the blue-chip gainers after the tech bellwether's rating was boosted to "buy" from "hold" by Auriga.
The S&P 500 slid 12.72 points, or 1.06 percent, to end at 1,185.90. The Nasdaq declined 19.80 points, or 0.78 percent, to finish at 2,529.14.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded above 34.
All 10 S&P sectors finished lower, led by financials and industrials.
Bernanke reiterated his speech from his Jackson Hole speech in August on the Fed's commitment to providing stimulus for the economybut offered no specific promises or details about what action could be taken, adding that the central bank still has tools at its disposal to foster economic growth.
“Today’s speech is confirmation of the one Bernanke gave in August that they’re seeing an economic slowdown and that [the Fed] might have to do something,” said Brian Battle, vice president of trading at Performance Trust Capital Partners. “The FOMC meeting on Sept. 20-21 will be very important to see if the Fed is actually going to take action.”
Speculation among economists has ranged from the Fed implementing a third round of quantitative easing to Operation Twist to other measures as well, including cutting the interest it pays on reserves that banks deposit at the Fed.
Earlier this week, the FOMC's Charles Evans said that the U.S.'s economy is growing so slowly that it is similar to a recession.
Meanwhile, President Obama is slated to unveil his much-anticipated plan to create jobs before a joint session of Congress at 7 pm ET. Obama is reported to be seeking as much as $300 billionin infrastructure investments and tax cuts to inspire hiring.
Bank stocks gave back some of their robust gains from the previous session. BofA , Citigroup and Morgan Stanley were all down more than 3 percent.
Among techs, Google acquired restaurant rating service company Zagat. Meanwhile, shares of Zagat's rival OpenTable slumped following the news.
Yahoo surged after hedge-fund manager Daniel Loeb called for an overhaul of the Internet company's board and discloses he has a 5.15 percent stake in the firm. Meanwhile, co-founder and ex-CEO Jerry Yang is trying to buy the company, according to Business Insider.
This comes after Yahoo fired CEO Carol Bartz, ending her tumultuous run at the helm of the group.
Microsoft gained after Nomura started coverage of the tech giant with a "buy" rating and a price target of $32 a share.
Intel and Texas Instruments finished lower after JPMorgan cut its price target for both chipmakers. TI is scheduled to release its mid-quarter update this afternoon.
FedEx may consider buying
On the earnings front, Smithfield Foods fell even after the food manufacturer beat earnings expectations as they benefited from higher prices. And Hovnanian edged lower even after the homebuilder trimmed its quarterly loss.
Meanwhile, FBR started coverage of a handful of homebuilders with a "market perform" rating including KBHome , Lennar , Pulte , Ryland and Meritage .
Corning ended lower after the specialty glass maker cut its forecast for the glass market, citing weak consumer demand over the holiday season.
Gold gained almost 2 percent, erasing most of the previous session's steep losses. Meanwhile, the euro fell to a two-month low against the dollarECB President Jean-Claude Trichet highlighted downside risks to the euro zone economy, signaling no rate increasesin the near term.
Markets were encouraged by events in Europe in the previous session after a court ruling backed Germany's role in bailing out other EU countries and as Italy's Senate approved a multibillion-euro austerity plan. Italy's lower house of parliament will debate and vote on the austerity measures next week.
Trading volume was light with the consolidated tape of the NYSE at 3.67 billion shares, while 947 million shares changed hands on the floor.
On the economic front, jobless claims edged higher last week, according to the Labor Department. Meanwhile, the trade deficit narrowed more than expected in July, posting its biggest month-to-month percentage drop since Feb. 2009, according to a government report.
—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC—
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