NEW YORK - US stocks fell sharply Friday in the wake of the Federal Reserve's decision against raising interest rates because of worries about slowing global economic growth.
A trader works on the floor of the New York Stock Exchange after the Federal Reserve chose not raise interest rates on September 17, 2015
The Dow Jones industrial Average dropped 289.95 (1.74%) to 16,384.79.
The broad-based S&P 500 sank 32.12 (1.61%) to 1,958.08, while the tech-rich Nasdaq Composite Index lost 66.72 (1.36%) at 4,827.23.
Analysts said the Fed's decision Thursday to keep benchmark rates at zero was concerning because it implied that headwinds facing the global economy are stronger than thought.
Also, the US central bank's failure to act despite previously suggesting a rate hike was imminent left investors uncertain of the outlook for US monetary policy.
"The fact that the Fed did not raise rates prolongs the uncertainty and the stock market does not like uncertainty," said Bill Lynch, director of investment, Hinsdale Associates.
"We just face more of the same in terms of this waiting game as to when they'll finally pull the trigger."
All 30 members of the Dow ended lower, with especially big drops at Caterpillar (-3.0%), Merck (-3.4%) and ExxonMobil (-2.4%).
Banking stocks fell sharply, with Citigroup losing 2.6% and Dow members JPMorgan Chase and Goldman Sachs shedding 2.7% and 3.0%, respectively.
Biotech stocks were another weak sector. Biogen fell 3.3%, Celgene shed 2.5% and Gilead Sciences lost 2.8%.
Dow member Coca-Cola fell 1.0% on news US tax officials told the soda company it owed $3.3 billion in taxes. Coca-Cola said it would contest the government's case.
Software company Adobe Systems rose 1.2% after third-quarter profit more than tripled to $174.5 million.
Hotel chain La Quinta Holdings sank 15.4% after announcing that Wayne Goldberg would step down as chief executive. The board appointed chief financial officer Keith Cline interim CEO.
Metals producer Freeport-McMoRan slumped 9.7% after it completed an equity offering of $1 billion and revealed plans to sell an additional $1 billion worth of shares.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.13% from 2.20% Thursday, while the 30-year dropped to 2.93% from 3.01%. Bond prices and yields move inversely.