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NEW YORK (CNNMoney)
The Dow Jones industrial average, the S&P 500 and the Nasdaq edged higher in morning trading, recovering from earlier weakness.
Investors are still digesting the outcome of the Federal Reserve's policy meeting Wednesday -- the first under the direction of chair Janet Yellen.
The official statement was as expected: The Fed will continue reducing its bond buying in April and the central bank will now base its interest rate policy on inflation data and a broad array of labor market indicators, instead of the unemployment rate alone.
But investors seized on a passing remark Yellen made during a press conference following the meeting. While the Fed plans to keep interest rates near zero for a "considerable period" after its bond buying program ends this fall, Yellen suggested that period could amount to just six months.
"Some clumsy moments at the podium by the new Fed Chair led to a more tumultuous day for the markets than many had expected," said Mike Wallace, an economist at Action Economics. Investors were also caught off guard by new forecasts from hawkish Fed officials about when a potential rate hike could occur, he added.
European markets were moving down in afternoon trading Thursday, while Asian markets closed with losses.
Related: Fear & Greed Index still in neutral
But while the stock market took a hit, the dollar rallied as a result of Yellen's comments and "the fact that the Federal Reserve sounded more hawkish than expected," according to Marc Chandler, currency strategist for Brown Brothers Harriman, who titled his market report, "Dollar rally as Yellen lays an egg."
The Chinese yuan hit a one-year low against the dollar.
Related: CNNMoney's Tech30
In economic news, the U.S. government said initial claims for unemployment benefits rose last week. An index of manufacturing activity by the Federal Reserve Bank of Philadelphia bounced back in March. The National Association of Realtors said rising prices and cold weather weighed on sales of existing homes in February.
In corporate news, Homebuilder Lennar (LEN) issued a strong report and said new orders in the latest quarter rose 10%. But the stock fell in early trading. Shares of other residential construction companies were also lower, including KB Home (KBH), D.R. Horton (DHI) and Hovnanian (HOV)
Shares of companies that make 3D printers fell after ExOne (XONE) reported a larger-than-expected loss and issued an outlook that disappointed investors. 3D Systems (DDD)and Voxeljet (VJET)were caught in the downdraft.
Burlington Stores (BURL) reported a quarterly jump in same-store sales and adjusted net income year-to-year. Shares of Guess (GES) fell after the apparel maker's revenue forecasts fell below analyst expectations. Dow company Nike (NKE, Fortune 500) will report after the market closes. 
First Published: March 20, 2014: 9:44 AM ET
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