“Stocks closed near session lows after selling off sharply in the final hour Wednesday as investors were cautious over the Fed’s grim outlook, even as it proposed plans to ramp up its aid to help the economy,” JeeYeon Park reports for CNBC. “The Fed announced it would launch a new $400 billion program in a move to rebalance its $2.87 trillion portfolio — a version of the widely expected Operation Twist — by selling shorter-term notes and using those funds to purchase longer-dated Treasurys. The Fed also said it would reinvest the proceeds from maturing agency debt and mortgage-backed securities into mortgage-related debt to help keep mortgage rates low and bolster the housing market.”

“The Dow Jones Industrial Average plunged 283.82 points, or 2.49 percent, to end at 11,124.84, led by BofA and JPMorgan,” Park reports. “The S&P 500 slumped 35.33 points, or 2.94 percent, to close at 1,166.76, logging its biggest drop in almost a month. The Nasdaq fell 52.05 points, or 2.01 percent, to finish at 2,538.19.”

Park reports, “On the tech front, Hewlett-Packard jumped following reports that the IT company’s board may consider replacing current CEO Leo Apotheker with former eBay CEO Meg Whitman. Apple closed slightly lower, even after Goldman Sachs raised its price target for the company from $480 to $520. Meanwhile, Apple is expected to announce its new iPhone 5 model on Oct. 4, according to AllThingsD, citing latest market rumors. New CEO Tim Cook is expected to take the stage to reveal the smartphone.”

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