YAHOO [BRIEFING.COM]: A negative response to the Fed's "Operation Twist," so labeled by market participants, stirred sellers to action today. Their conviction made it impossible for tech stocks to provide leadership after trading with strength for so much of the session.

The FOMC announced this afternoon that in order to support a stronger economic recovery it intends to purchase $400 billion of Treasuries with maturities of six years to 30 years, while selling an equal amount of Treasuries with remaining maturities of three years or less, by the end of June 2012. Many market pundits had anticipated such a plan, and had already designated it "Operation Twist" to reflect the Fed's focus on selling shorter term Treasuries and buying longer term issues.

To little surprise, the FOMC also reiterated that it expects economic conditions to warrant exceptionally low levels of the federal funds rate at least through mid-2013.

A knee-jerk response to the Policy Statement made for some whipsaw action among stocks, but the major equity averages eventually broke down and descended deep into negative territory. The Dow, S&P 500, and Nasdaq Composite all closed at session lows.

Although nothing slight, the Nasdaq's loss wasn't quite as severe as that of its counterparts. The Nasdaq had been propped up for the better part of the session by tech plays following better-than-expected quarterly reports and forecasts from Oracle (ORCL 29.82, +1.47) and Adobe (ADBE 24.93, +0.29). Autodesk (ADSK 28.71, +0.60) also attracted buyers after analysts at JPMorgan upgraded the stock.

Although not a member of the Nasdaq, software products, solutions, and services outfit Hewlett-Packard (HPQ 23.96, +1.49) staged an impressive performance as participants applauded the idea that the company may be considering the removal of its current Chief Executive.

Tech giant Microsoft (MSFT 26.11, -0.86) announced a 25% hike to its quarterly dividend, but that actually induced a negative reaction as investors regarded it as another sign that the firm continues to struggle to find investment-worthy growth opportunities.

Tech stocks ended the day with a 1.3% loss near its 50-day moving average after the group had been up more than 1% at their session high. Still, their loss was the least severe of any major sector.

Financials fell the hardest. The sector slumped to a 4.9% loss as banking plays and diversified financial services stocks tumbled. Analysts at Moody's announced today that they have downgraded the debt on Bank of America (BAC 6.38, -0.52), Citigroup (C 25.52, -1.41), and Wells Fargo (WFC 23.71, -0.96).

Treasuries rallied in response to the Fed's plan and the stock market's weakness, such that the yield on the benchmark 10-year Note fell back below 1.90% to flirt with record lows.

Commodities like gold, silver and crude oil spent the session waiting on today's Fed decision. Gold, which posted very modest losses to close at $1807 per ounce, and silver, which ended up 1.8% at $40.53 per ounce, have since sold off sharply on the heels of the Fed's decision. Both metals were pressured by the surge seen in the dollar. Gold recently put in fresh lows at $1781.30, while silver remains just above overnight highs at $39.77.

Despite this morning's bearish inventory data, crude oil traded near the flat line heading into the FOMC announcement. Futures, which closed down 1.1% at $85.92 per barrel minutes after the announcement, sold off sharply into negative territory on the strength in the dollar and corresponding weakness in equities. They remain near lows, at $85.08, in electronic trade. Natural gas prices ended lower by 1.8% at $3.73 per MMBtu ahead of tomorrow's inventory data.

Advancing Sectors: (None)
Declining Sectors: Tech -1.3%, Utilities -1.7%, Consumer Staples -1.8%, Telecom -2.1%, Health Care -2.6%, Consumer Discretionary -3.0%, Industrials -4.0%, Energy -4.0%, Materials -4.5%, Financials -4.9%DJ30 -283.82 NASDAQ -52.05 NQ100 -1.6% R2K -3.7% SP400 -3.4% SP500 -35.33 NASDAQ Adv/Vol/Dec 444/2.16 bln/2132 NYSE Adv/Vol/Dec 442/1.21 bln/2593