The Federal Reserve's latest take on the U.S. economy got investors in a selling mood Wednesday, as stocks fell sharply for the second straight day.

The stock market also took a hit when benchmark U.S. oil sank to its lowest level in nearly six years, hurting prospects for energy companies.

The central bank issued a statement Wednesday making clear that it would remain "patient" in raising interest rates from near zero, which was expected. But the Fed also strengthened its assessment of the U.S. economy, noting it is expanding at a solid pace and generating strong job growth.

That's good news for Main Street and Corporate America, but signals that the Fed is moving closer to raising rates, even if it's not contemplating an imminent hike. When interest rates remain low they tend to make stocks more attractive by comparison to bonds.

"The market is, on one hand, happy the Fed is saying things look solid, but it means at some point we will get that first rate hike," said Quincy Krosby, market strategist for Prudential Financial.

The Energy Department reported that U.S. oil inventories rose to their highest levels ever recorded. Those high supplies drove crude prices to the lowest level since March 2009. Benchmark U.S. crude fell $1.78 to close at $44.45 a barrel in New York. As recently as June, it traded above $100.

Inflation has stayed ultra-low partly because of the plunge in energy prices and a steadily rising dollar. The Fed noted it anticipates inflation will decline further before starting to rise gradually.

Prices for the benchmark 10-year Treasury jumped after the Fed statement came out, knocking the yield to 1.70 percent, the lowest level this year. It edged back up to 1.72 percent late in day, compared with 1.82 percent late Tuesday. The yield on the 30-year bond, meanwhile, touched a record low of 2.27 percent.

"The Fed has a much more beneficial view on drop in oil than the stock market does," said John Canally, chief economic strategist at LPL Financial.

All told, the Dow Jones industrial average dropped 195.84 points, or 1.1 percent, to close at 17,191.37.The Standard & Poor's 500 index lost 27.39 points, or 1.4 percent, to 2,002.16.

The Nasdaq composite dropped 43.50 points, or 0.9 percent, to 4,637.99.

The market had been in a wait-and-see mode in advance of the Fed statement, drifting between small gains and losses for much of the day. Falling oil prices dragged the energy sector lower, while strong earnings from Apple helped lift tech stocks.

The market initially perked up after the Fed issued its statement at 2 p.m. Eastern Time. But the gains were short-lived, and by late afternoon three major indexes slumped, extending their losses for the year. The Dow in now 4.8 percent below its all-time high of 18,053.71 on Dec. 26. The S&P 500 index is down 4.2 percent from its high of 2,090.57 on Dec. 29.

The 10 sectors in the index fell Wednesday, with energy stocks falling the most.

Among the biggest decliners were several oil and gas exploration companies, as well as drilling services and equipment providers.

Nabors Industries lead declines. It slid $1.39, or 11.7 percent, to $10.49. Denbury Resources lost 67 cents, or 9.4 percent, to $6.47. Hess Corp. tumbled $5.59, or 7.8 percent, to $66.02.

Apart from the Fed, investors have been closely monitoring company earnings this week. They're trying to assess whether Corporate America can continue to grow profits amid concerns that economic growth could weaken overseas.

"This is a market that has to get used to focusing on what companies tell us in terms of their bottom line and their top line," Krosby said. "And you're already seeing it in the market during this earnings season."

Investors cheered strong financial results from Apple, which reported record-smashing quarterly earnings late Tuesday. The stock added $6.17, or 5.7 percent, to $115.31.

Boeing also got a lift after it reported that its profit vaulted 19 percent in the fourth-quarter on strong demand for commercial jets airliners. The stock rose $7.16, or 5.4 percent, to $139.64.

Along with Boeing, several other companies turned in better-than-expected financial results on Wednesday, including video-game maker Electronic Arts, storage container seller Tupperware Brands, computer chip maker Freescale Semiconductor and steel company U.S. Steel.