Some policy-makers at the U.S. Federal Reserve are worried that its stimulus program could eventually unsettle financial markets or cause the central bank to take losses. (Charles Dharapak/Associated Press)

The Toronto Stock Exchange closed lower Thursday, a day after the U.S. Federal Reserve disclosed concerns about how long to continue its open-ended stimulus program of bond purchases.

The S&P/TSX composite index fell 74.08 points to 12,639.97.

The Canadian dollar lost 0.14 of a cent to 98.16 cents US as traders avoided risk and resource-based currencies such as the loonie.

U.S. indexes were also in the red in the wake of the Wednesday release of minutes from the Fed's last policy meeting.

They showed some policy-makers at the U.S. central bank were worried that the Fed's $85 billion US in monthly bond purchases could eventually unsettle financial markets or cause the Fed to take losses.

The purchases, commonly known as quantitative easing, are designed to boost the U.S. economy by increasing liquidity in financial markets.

The Fed said it would review its asset purchases program at its the March meeting.

The Dow Jones industrials fell 46.92 to 13,880.62, the Nasdaq composite index dropped 32.92 points to 3131.49 and the S&P 500 index was 9.53 points lower at 11,502.42.

Meanwhile, analysts suggested that the Fed could end its latest quantitative easing effort by the end of 2013.

"Our U.S. team believes that although there is increased attention on the costs of QE, such a divided (Fed) committee means that it is unlikely we will get changes any time soon, or that there will be any tweaks of the asset purchase program given the Fed's limited means to calibrate policy," said a commentary from RBC Dominion Securities.

"We think changes to QE are more likely to occur in very lumpy steps and the Fed will cut purchases from $85 billion to $40 billion per month in the fourth quarter, followed by an end to QE at year-end."

Traders flocked to the perceived safe haven of U.S. Treasuries following the release of the Fed minutes Wednesday, pushing the greenback higher and commodities lower.

Crude falls

A higher U.S. dollar pressures commodities because a stronger greenback makes it more expensive for holders of other currencies to buy oil and metals, which are dollar-denominated.

The April crude contract on the New York Mercantile Exchange lost $2.38 to $92.84 a barrel on top of a $2 slide Wednesday.

Oil prices were also undercut by the release of the U.S. Energy Department's Energy Information Administration weekly inventory report Thursday, showing U.S. crude supplies rose by 4.14 million barrels, more than twice what the market had expected.

Copper prices were down sharply for a second day with the March contract on the Nymex off five cents at $3.56 US a pound, adding to a four-cent fall Wednesday.

The April bullion contract rose $1.50 to $1,579.50 US an ounce after closing at a seven-month low Wednesday.

The latest declines in bullion prices were sparked by the Fed minutes because the central bank's quantitative easing has supported gold. That is because the bond buying program has encouraged worries about rising inflation and gold is seen as a hedge against rising prices.

Signs of a weakening eurozone depressed overseas markets.

A monthly composite output index for the eurozone from financial information company Markit, fell to 47.3 points in February from the previous month's 48.6.

London's FTSE 100 index closed lower by 1.62 per cent, Frankfurt's DAX lost 1.88 per cent and the Paris CAC 40 declined 2.29 per cent.

Earlier in Asia, Japan's Nikkei 225 fell 1.4 per cent while Hong Kong's Hang Seng tumbled 1.7 per cent. Australia's S&P/ASX 200 fell 2.3 per cent and South Korea's Kospi dropped 0.5 per cent.

In mainland China, the Shanghai Composite Index plummeted three per cent, the index's biggest loss in almost 15 months. The smaller Shenzhen Composite Index shed two per cent.