U.S. stocks and Treasury prices dived Tuesday after Federal Reserve policymakers said they were worried that hiring might slow down if economic growth does not pick up.
The Dow Jones industrial average was down 90 points to 13,174 with about a half-hour of trading to go. It was down about 40 points when the Fed released minutes from its March meeting at 2 p.m.
The Standard & Poor's 500 index was down 10 points to 1,410. The Nasdaq composite index dropped 14 to 3,105.
Rampant selling by bond traders raised the yield on the 10-year Treasury note to 2.28 percent from 2.16 percent earlier Tuesday.
Traders of stocks and government bonds were selling because the Fed, despite the dimmer outlook, did not appear likely to buy more bonds to help the economy, said Stephen Carl, head equity trader at The Williams Capital Group.
The Fed minutes showed that policymakers had spent little time discussing another round of bond purchases to help the economy. The Fed has embarked on two previous rounds of bond-buying, most recently in August 2010, to drive down long-term interest rates and encourage investors to buy stocks.
Among the other ripples in the financial markets in the first hour after the Fed's announcement:
-- The sell-off in Treasurys was broad. The price of the 30-year Treasury bond fell $2.53 per $100 invested, pushing its yield up to 3.40 percent from 3.32 percent before the Fed minutes.
-- Gold fell $38 an ounce to $1,642. The selling started shortly before the Fed minutes were released. Gold had been unchanged for most of the morning.
-- The dollar rose against the euro, also after being virtually unchanged for most of the day. The euro was down 1.1 cents against the dollar to $1.322 in afternoon trading.
Many traders were in wait-and-see mode all morning before the Fed minutes were released. Stocks drifted lower despite solid reports on auto sales and factory activity.
Orders to factories bounced back by a solid 1.3 percent in February as businesses made more long-term investments, the Commerce Department said after the market opened.
The news bolstered earlier signals that U.S. consumers are feeling confident enough in the economy to buy higher-cost items like cars after years of putting off major purchases.
Chrysler said earlier that sales of its vehicles spiked by one-third last month, making March its best month in four years. Sales were helped by the introduction of small cars from the company's Fiat brand. Ford's sales rose 5 percent, General Motors' by 12 percent.
The afternoon selling doused any enthusiasm the market carried into the week after it closed its best first quarter in more than a decade. The Dow and S&P both closed at multi-year highs Monday.
Trading volumes have been light for about two weeks in part because there has been relatively little news to move markets. Many companies are quiet ahead of earnings season, which begins in earnest next week.
The government will release its March jobs report on Friday. Economists expect that hiring slowed modestly last month after three of the best months for the labor market since the recession. The report's impact on the market might be muted because markets will be closed for the beginning of Easter weekend.
In corporate news:
-- Molson Coors Brewing Co. fell 5 percent after the company made a major investment overseas, putting up more than $3.5 billion to snap up StarBev and its nine breweries in central and eastern Europe.
The brewer lost ground in the U.S. as the recession ravaged its customers, but it had a big quarter to end the year. It hopes to repeat that success in Europe, riding into the market while the economy are slow then riding the rebound as Europe recovers. It announced the StarBev deal the day after the European Union said that unemployment has reached the highest point since the euro was introduced in 1999.
-- Investment bank Morgan Stanley fell 3 percent after the Federal Reserve said a mortgage division had abused consumers in the foreclosure process. Morgan Stanley has since sold the division, Saxon Mortgage Services Inc., to Ocwen Financial Corp.
-- Home products retailer Conn's Inc. surged 16 percent after it beat analysts' profit forecasts in the fourth quarter and boosted its earnings guidance for the upcoming year.
-- Express Scripts Inc. gained another 3 percent a day after completing its $29.1 billion acquisition of Medco Health Solutions, forming the largest pharmacy benefits manager in the country. The stock is up 6 percent this week.
Daniel Wagner can be reached at www.twitter.com/wagnerreports.