Stocks plunge after Fed announces stimulus steps

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NEW YORK (AP) — Stocks have plunged after the Federal Reserve said it would buy long-term bonds to help the economy. Investors were expecting the Fed’s move, but they doubted that it would have much of an impact.

The Dow Jones industrial average fell 283 points, or 2.5 percent, to close at 11,124. The Standard & Poor’s 500 index fell 35, or 2.9 percent, to 1,166. The Nasdaq composite fell 52, or 2 percent, to 2,538.

The Fed said it would buy $400 billion in 6-year to 30-year Treasurys by June 2012 and sell the same amount of Treasurys maturing in 3 years or less. The move is designed to lower long-term interest rates — like rates on consumer loans.

Twenty-three stocks fell for every one that rose on the New York Stock Exchange.