U.S. stocks finished lower on Thursday, extending losses into a third session, as investors considered the timing of any reductions in the Federal Reserve's monetary stimulus.
"The market has been sideways now for the last month or so as investors are digesting what the Fed may do with their quantitative easing program. We won't know until it occurs whether it's priced in or not," said Paul Nolte, managing director at Dearborn Partners in Chicago.
Ciena fell sharply after the provider of fiber-optic networking gear for telecommunications companies reported fourth-quarter adjusted earnings of 16 cents a share, below Wall Street's expectations.
Facebook shares rose after S&P Dow Jones Indices said the social-networking company would join the Standard & Poor's 500 Index next week.
Hilton Worldwide Holdings rose sharply in making its return to the public market. The hotelier, which was taken private in 2007, on Wednesday priced its initial public offering at $20 a share.
Oracle declined after RBC Capital Markets cut its rating on its stock.
"It looks like a reversal from yesterday, because the Dow did so much better than anything else, and today the Dow is doing worse than anything else," said Nolte.
Cisco Systems also fell. Cisco's CFO on Thursday cut the Dow component's long-term revenue growth forecast, saying the company expects revenue growth of between 3 percent to 6 percent a year, down from 5 percent to 7 percent, over three years.
Consumer staples and health care were hardest-hit and energy and utilities performed the best among the 10 major sectors on the S&P 500, which lost 6.72 points, or 0.4 percent, to 1,775.50.
The Nasdaq erased gains late in the session to finish in the red, losing 5.41 points, or 0.1 percent, to end at 3,998.40.
The U.S. dollar climbed against other global currencies, and the yield on the benchmark 10-year Treasury note used in figuring mortgage rates and other consumer loans rose 2 basis points to 2.88 percent.
While the 10-year rising to 3 percent was enough to rattle stocks not long ago, Nolte downplayed its current impact. "I don't think at 3 percent the 10-year provides a ton of competition to the equities market."
For every two shares rising, roughly three declined on the New York Stock Exchange, where 573 million shares traded. Composite volume totaled 3.4 billion.
The Commerce Department reported U.S. retail sales rose 0.7 percent in November versus 0.6 percent the month before.
A separate report had initial jobless claims rising 68,000 to 368,000 last week.
"There is a consensus building that they should do something in December," said Nolte, referring to the recent trend of better-than-expected economic data. "However, maybe Ben Bernanke does nothing and defers to Janet Yellen, but that's inside baseball," he added the current Fed chairman, whose term expires next month, and his designated successor.
The Federal Reserve could begin cutting its $85 billion in monthly bond purchases at its meeting next week. The market has rallied in 2013, with the S&P 500 up nearly 25 percent, as the central bank held off on tapering its asset buys.
"It's been a very good year, and I think the markets are just marking time at this point," said Nolte at Dearborn Partners.