NEW YORK (AP) -- A big rally in U.S. stocks evaporated Wednesday as the Federal Reserve appeared to struggle with questions related to inflation and government policy and suggested it might start trimming its balance sheet later in the year.
Stocks had jumped early on after payroll processor ADP said private U.S. businesses added 263,000 jobs in March, which was more than analysts expected. The Dow Jones industrial average rose as much as 198 points, and the Nasdaq composite reached an all-time intraday high. Industrial and energy companies made some of the largest gains.
But stocks halted their advance and started falling at 2 p.m. Eastern, when the Federal Reserve disclosed the minutes from its policy meeting last month. The minutes showed Fed officials discussing plans to reduce the Fed's bond holdings later this year and disagreeing over whether it would be safe to let inflation rise faster and how to deal with the economic impact of President Donald Trump's stimulus ideas.
The Standard & Poor's 500 index lost 7.21 points, or 0.3 percent, to 2,352.95. The Dow sank 41.09 points, or 0.2 percent, to 20,648.15. The Nasdaq fell 34.13 points, or 0.6 percent, to 5,864.48. The Russell 2000 index of small-company stocks lost 16.03 points, or 1.2 percent, to 1,352.14.
The Federal Reserve bought trillions of dollars' worth of bonds during the financial crisis of 2008-09 in an effort to stimulate the economy. When its bonds mature, it has continued to buy new ones. But now, the Fed may stop buying new bonds when older ones mature, which would gradually shrink the size of its holdings.
That sent bond prices surging and yields tumbling. The yield on the 10-year Treasury note fell to 2.33 percent from 2.36 percent. When bond yields fall, interest rates fall with them. That tends to hurt banks because it means reduced profits on lending, and banks took the largest losses Wednesday. JPMorgan Chase dropped $1.12, or 1.3 percent, to $86.19 and BB&T shed 56 cents, or 1.3 percent, to $43.98.
Banks made strong gains in early trading but they wound up with much bigger losses than the rest of the market.
For the last couple of months it seemed investors and the Fed understood each other well, as the central bank indicated it intended to keep raising interest rates gradually assuming the economy continued to grow at a steady clip. It raised rates in December and March. The uncertainty reflected in the Fed's March meeting may challenge that understanding.
Soup and sandwich chain Panera agreed to be acquired by JAB Holding of Europe for $315 a share. JAB has quietly become a rival to Starbucks in recent years as it owns, or has a large stake in, a series of brands that includes Peet's Coffee & Tea, Caribou Coffee, Stumptown Coffee, Keurig Green Mountain and Krispy Kreme Doughnuts. Panera stock jumped in recent days thanks to rumors about a deal. It rose $38.94, or 14.2 percent, to $312.94. The stock was trading at $230 a share a month ago.
Early Wednesday, U.S. and European regulators approved the sale of Swiss agribusiness Syngenta to ChemChina. ChemChina will have to sell some businesses to complete the $43 billion deal, but those rulings may have made investors more hopeful that two other giant chemical deals will be approved.
Dow Chemical and DuPont, which plan to combine, both rose. Dow Chemical gained 32 cents to $63.52 and DuPont added 67 cents to $80.47.
Monsanto reported profit and sales that were far better than analysts expected. Monsanto said profits from its corn and soybean businesses grew in the fiscal second quarter. It also backed its forecasts for the year and said its sale to Bayer of Germany should close by the end of the year. The stock rose $1.10, or 1 percent, to $115.31.
Greenbrier, which makes railroad freight car equipment, announced a bigger profit and better sales than analysts expected. It also said rail traffic is growing and announced a $1 billion agreement with a key customer. Greenbrier stock climbed $4.30, or 10 percent, to $47.25.
U.S. crude oil rose 12 cents to $51.15 a barrel in New York. Brent, the international standard, gained 19 cents to $54.36 a barrel in London.
In other energy trading, wholesale gasoline remained at $1.72 a gallon. Heating oil rose 1 cent to $1.60 a gallon. Natural gas decline 3 cents to $3.27 per 1,000 cubic feet.
Gold sank $9.90 to $1,248.50 an ounce. Silver lost 14 cents to $18.19 an ounce. Copper jumped 7 cents, or 2.6 percent, to $2.68 a pound. Those moves reflected investors' earlier optimism, as precious metals trading ends before stock trading does.
The dollar rose to 110.86 yen from 110.65 yen. The euro fell to $1.0667 from $1.0670.
The FTSE 100 index in Britain gained 0.1 percent. France's CAC 40 lost 0.2 percent and the DAX in Germany fell 0.5 percent. Japan's Nikkei 225 index gained 0.3 percent and Hong Kong's Hang Seng advanced 0.6 percent. The Kospi of South Korea finished little changed.