Stocks sink as Fed dashes stimulus hopes

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NEW YORK (CNNMoney) -- U.S. stocks dropped Tuesday after the Federal Reserve indicated it was unlikely it would offer more stimulus anytime soon.

Investors grew skittish after the Federal Reserve released minutes from its most recent open committee meeting around 2 p.m. The Fed's comments suggested that it was less likely the central bank would intervene to help the markets unless growth slows.

"The market expects another round of easing, and each time they get a sign that it might not be the case, stocks sell off," said Paul Powers, head of equity trading at Raymond James.

The Dow Jones industrial average (INDU) ended the day down 65 points, or 0.5%. The S&P 500 (SPX) shed 6 points, or 0.4%. The Nasdaq (COMP) fell 6 points, or 0.2%.

Financial stocks were among the biggest decliners Tuesday, with shares of Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), Morgan Stanley (MS, Fortune 500), JPMorgan Chase (JPM, Fortune 500), and Goldman Sachs (GS, Fortune 500) all falling more than 1%.

U.S. stocks ended higher Monday after a manufacturing report showed prices rising less than expected, signaling that inflation may not be a near-term concern. Last week saw several disappointing reports on housing and durable goods, which caused investors to retreat a bit.

Prior to that, stocks had largely been on a tear, with the Dow and S&P 500 ending their best first quarter in over a decade. The Nasdaq had its best first quarter since 1991.

The focus later this week will be on the jobs report for March, which is due out Friday. However, U.S. stock markets will be closed in observance of Good Friday, and bond markets will close early.

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Economy: A report on factory orders for February came in below expectations after the report said activity picked up by 1.3% compared to expectations of 1.4%. January orders dropped by 1%.

Auto sales were in focus throughout the day. Chrysler Group said March was the best month for sales in four years. Ford (F, Fortune 500) sales rose 5% and GM (GM, Fortune 500) sales surged 14.2% in March from year-earlier levels.

Companies: Shares of Apple (AAPL, Fortune 500) hit a new all-time high Tuesday, after several analysts raised their price targets on the stock. One analyst predicted that shares, which recently cleared $600, could top $1,000.

Avon Products (AVP, Fortune 500) shares dropped Tuesday, following gains of more than 17% Monday, after the company rejected a $10 billion purchase offer from beauty company Coty Inc.

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Daily deals site Groupon (GRPN) remains in the spotlight following a report in Tuesday's Wall Street Journal saying that the Securities and Exchange Commission is probing its revision of its first set of results as a publicly traded company.

Shares of retailer Urban Outfitters (URBN) surged after the company gave upbeat guidance in a SEC filing.

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Currencies and commodities: The dollar gained against the Japanese yen and British pound, but fell versus the euro.

Oil for May delivery slipped $1.04 to $104.19 a barrel.

Gold futures for April delivery fell $33.10 to $1,646.90 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury dropped Tuesday, pushing the yield up to 2.29%.

World markets: European stocks ended lower. Britain's FTSE 100 (UKX) slid 0.6%, the DAX (DAX) in Germany dropped 1.05% and France's CAC 40 (CAC40) lost 1.6%.

Asian markets ended mixed. The Hang Seng (HSI) in Hong Kong gained 1.3%, while Japan's Nikkei (N225) fell 0.6%. The Shanghai Composite (SHCOMP) was closed for early April's Tomb Sweeping holiday.