U.S. stocks fell on Wednesday as renewed turbulence in the euro zone over financial bailouts led investors to book profits from recent gains as a strong third quarter nears an end.
Violent protests in Madrid against expected austerity measures and growing talk of secession in Catalonia increased pressure on Spanish Prime Minister Mariano Rajoy as he maneuvers before asking euro zone policymakers for rescue money.
Meanwhile, Greece faced its biggest anti-austerity protest in more than a year as international lenders admitted to difficulty in working out how to solve Athens' debt crisis.
"There is still a real risk that Europe has to make some decisions that could hold the market together ... over the next few weeks as it relates to Greece and certainly Spain," said T. Doug Dale, chief investment officer for Security Ballew in Jackson, Mississippi.
"There are still enough unknowns out there that it doesn't take a whole lot to get the S&P back off."
The Dow Jones industrial average <.DJI> shed 11.25 points, or 0.08 percent, to 13,446.30. The Standard & Poor's 500 Index <.SPX> lost 6.06 points, or 0.42 percent, to 1,435.53. The Nasdaq Composite Index <.IXIC> dropped 26.02 points, or 0.83 percent, to 3,091.71.
The S&P 500 is up more than 5 percent for the third quarter and nearly 2 percent for September, historically a weak month for equities, largely due to actions taken by the U.S. Federal Reserve and European Central Bank to prop up their economies.
But the benchmark index has fallen 1.8 percent since the Fed's most recent stimulus plan on September 13 as earnings warnings from bellwethers such as FedEx Corp and Caterpillar Inc have sparked concerns about global growth.
Jabil Circuit tumbled 9.3 percent to $19.01 after the technology company reported fourth-quarter earnings that missed expectations and forecast weak first-quarter results.
Investors' sentiment was reflected in the session's best performing sectors, which were defensive plays such as utilities <.GSPU>, telecoms <.GSPL> and consumer staples <.GSPS>.
Longer term, the equity outlook is positive. While the S&P 500 isn't expected to move much from its current level through to the end of the year, according to a Reuters poll of analysts, it is seen advancing in the first half of 2013, largely on central bank actions.
Stocks fell despite a government report that prices of new U.S. single-family home sales vaulted to their highest level in more than five years in August.
American Greetings Corp jumped 13.5 percent to $16.27 after the company said it received an offer to go private from a group led by its chief executive, valuing the greetings card company at about $580 million.
Yahoo Inc new Chief Executive Marissa Mayer laid out goals for the Internet company in her first companywide address Tuesday and chose a new chief financial officer. Shares slipped 0.3 percent to $15.63.
(Editing by Kenneth Barry)