The Federal Reserve warned yesterday of prolonged economic sluggishness. The markets opened sharply lower with the Dow slumping 301 points to 10,823. Nasdaq plunged 51 points to 2486.

On the upside

United Technologies (NYSE: UTX) will pay approximately $16.4 billion in cash to acquire Gooodrich (NYSE: GR).

Herman Miller (Nasdaq: MLHR) reported sharply higher first quarter earnings and revenue that surpassed analyst expectations.

Wedbush analyst Michael Pachter upgraded (Nasdaq: NFLX) to an Outperform rating saying that the company may sell its streaming business to Amazon (Nasdaq: AMZN).

On the downside

Shares of Molycorp (Nasdaq: MCP) continued falling after JPMorgan downgraded the rare earth metals company on Tuesday and slashed its price target as well as its full year earnings outlook.

Logitech (Nasdaq: LOGI) slashed its 2012 earnings outlook for the third time.

CarMax (NYSE: KMX) reported higher second quarter earnings but the results fell short of analyst expectations.

In the broad market, declining issues outpaced advancers by a margin of nearly 9 to 1 on the NYSE and by more than 6 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks plunged 14 points to 649.