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Stocks drop as earnings disappoint; Fed upcoming

NEW YORK (AP) -- Stocks were lower in early trading Wednesday as investors assessed the latest company earnings reports and awaited news from the Federal Reserve, which wraps up its two-day policy meeting later in the day.

KEEPING SCORE: The Dow Jones industrial average fell 111 points, or 0.7 percent, to 15,817 in the first half-hour of trading. The Standard & Poor's 500 index lost 11 points, or 0.6 percent, to 1,781. The Nasdaq composite fell 26 points, or 0.7 percent, to 4,070.

FED DAY: The Federal Reserve wraps up a two-day policy meeting and is expected to announce that it will continue to reduce, or “taper,” its bond purchases to $65 billion a month from $75 billion a month. The policy is intended to hold down long-term interest rates and stimulate the economy by encouraging borrowing and hiring.

“The common thought is that the Fed is to continue its tapering at $10 billion,” said Joe Bell, a senior equity analyst at Schaeffer's Investment Research.

NOT GOOGLE: Yahoo fell $2.48, or 7 percent, to $35.75 after the company reported a drop in fourth-quarter revenue late Tuesday, highlighting the company's trouble in bringing in online advertising dollars. The internet company reported a 6 percent decline in revenue, the same rate of decline for all of 2013.

PLANE DISAPPOINTEMENT: Boeing fell $6.09, or 4.4 percent, to $131 after the plane maker said that 2014 revenue and profit would be lower than analysts have been expecting as the pace of orders slows.

PHONING IT IN: AT&T, the nation's biggest telecommunications company, fell $1.52, or 4.5 percent, to $32.14 after its outlook for the year disappointed investors. The phone company said its forecast “assumes no lift from the economy,” and predicted earnings to be in the mid-single digit range.

TREASURYS AND COMMODITIES: Bond prices rose. The yield on the 10-year Treasury note fell to 2.72 percent from 2.75 percent. The price of oil fell 44 cents to $96.99 a barrel. Gold rose $16.40, or 1.3 percent, to $1,267 an ounce.

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