Wall Street turns red after Fed fails to impress

By Noel Randewich

(Reuters) - Wall Street dropped on Wednesday after the U.S. Federal Reserve frustrated investors hoping for a strong sign it might scale back future interest rate hikes because of recent financial and economic turmoil.

In a widely expected decision, the Fed kept interest rates unchanged and it said it was "closely monitoring" global economic and financial developments, but it maintained an otherwise upbeat view of the U.S. economy.

"It sounds like they are unimpressed with what has happened in the markets, that it has been insufficient to change their plans. That's the takeaway and it's why the market is going down," said Stephen Massocca, Chief Investment Officer of Wedbush Equity Management LLC in San Francisco.

Major stock indexes moved lower, reversing earlier gains driven by a jump in crude prices after Russia said it was discussing the possibility of cooperation with OPEC and U.S. data showed an increase in short-term demand.

At 3:04 p.m., the Dow Jones industrial average was down 1.39 percent at 15,943.29 and the S&P 500 lost 1.18 percent to 1,881.15.

The Nasdaq Composite dropped 2.15 percent to 4,469.39.

Half of the 10 major S&P sectors were down, led by the tech sector's <.SPLRCT> 1.9 percent descent.

Apple's shares fell 6.3 percent after the iPhone maker reported its slowest-ever rise in shipments on Tuesday, while Boeing lost 8.9 percent, on track for its biggest fall since August 2011.

Textron slid 13 percent while Tupperware sank 14.8 percent after both companies' revenue missed estimates.

VMware lost 9.3 percent after its 2016 forecast was weaker than expected.

Among the few gainers, Biogen rose 5.5 percent after its profit and revenue beat expectations.

Tech majors Facebook , Qualcomm and eBay are slated to report after the close.

Declining issues outnumbered advancing ones on the NYSE by 1,584 to 1,417. On the Nasdaq, 1,724 issues fell and 998 rose.

The S&P 500 index showed three new 52-week high and five new lows, while the Nasdaq recorded 10 new highs and 62 lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)