U.S. stocks and Treasury prices dived Tuesday after Federal Reserve policymakers said they were worried about a slowdown in hiring and appeared to resist buying more bonds to help the economy.
The Dow Jones industrial average was down as much as 133 points after the Fed released minutes of the March meeting of its Open Market Committee. It was down 40 points before the minutes were released.
Just before the closing bell, the Dow had improved to a decline of 100 points, at 13,164. The Standard & Poor's 500 index was down 10 points to 1,410. The Nasdaq composite index dropped 14 to 3,105.
The minutes showed that policymakers were concerned hiring could slow if economic growth doesn't improve. The country added an average 245,000 jobs per month from December through February, the strongest since the Great Recession.
The Fed minutes also showed that only two of 10 voting committee members said they would support another round of bond purchases, and probably only if the economy lost momentum.
The release of the minutes reduced demand for government bonds, driving prices down and yields up. The yield on the benchmark 10-year Treasury note to 2.28 percent from 2.16 percent earlier Tuesday.
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.
-- 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.