NEW YORK ( TheStreet) -- U.S. markets on Wednesday erased morning gains, falling sharply after the Federal Reserve's minutes from its latest policy-making meeting showed that some members are open to scaling back monetary stimulus by June.
The minutes came hours after Fed Chairman Ben Bernanke reiterated his support of current monetary policy and argued that a pull-back in quantitative easing wouldn't be a prudent move.
"A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth," the minutes said.
The S&P 500 lost 0.83% to 1,655.35 while the Dow Jones Industrial Average was off by 0.52% to 15,307.56. The Nasdaq dropped 1.11% to 3,463.30.
"There's been some dissenters for a while now; I kind of took the minutes that there was still a lion's share that kind of confirmed that the economy was still struggling, unemployment was still relatively high and you can still see the depth of purchases continuing," Rob Stein, senior managing director at Astor Asset Management, said in a phone interview.
Bernanke's comments built upon St. Louis Federal Bank President James Bullard's remarks Tuesday that quantitative easing remains the best monetary policy option right now.
"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," he said. "Such outcomes tend to be associated with extended periods of lower, not higher, interest rates, as well as poor returns on other assets. Moreover, renewed economic weakness would pose its own risks to financial stability."
NetApp rose in the S&P after the data storage company said Tuesday it planned to cut 900 jobs as part of a restructuring. NetApp said it would begin paying a quarterly dividend of 15 cents a share, and boosted its stock buyback plan to $3 billion. The company posted fiscal fourth-quarter adjusted earnings of 69 cents a share, topping estimates by a penny. Shares gained 1.8% to $37.28.
Intuit was also a top gainer, up 1.2% to $58.59 after the software producer booked fiscal third quarter earnings that exceeded estimates by four cents at $2.97 a share and sales that also beat expectations as online customers for its small business services increased.
Bristol-Myers Squibb was one of the biggest percentage gainers on the S&P as shares popped 5.3% to $46.40 after Citi analyst Andrew Baum raised his rating on the pharmaceutical company to "buy" from "neutral" and hiked his price target to $55 from $33, writing that Bristol-Myers could stand to gain significantly from its cancer treatments in the pipeline. "Active immunotherapy will become the backbone of at least 60% of cancer indications over the next ten years ... Bristol-Myers' very broad checkpoint agent positioned to capture a very significant share of an emergent $24 billion checkpoint agent market," he wrote.