United States stocks held broad losses at midday as weakness in global stocks and mixed reports from a pair of industrial companies prompted a pause in the recent rally.
The Dow Jones Industrial Average dropped 77 points, or 0.5%, to 15,391 points, with 23 of 30 components lower.
The S&P 500 index gave up 11 points, or 0.6%, to 1,744 points, with eight of 10 sectors declining.
The Nasdaq Composite Index shed 31 points, or 0.8%, to 3,899 points.
European stocks retreated from recent multiyear highs, and the banking sector weighed on benchmarks after the announcement of stress tests. A rise in the yen and a jump in Chinese interbank lending rates sparked declines in Asian stock markets, setting a negative tone for the session.
Before midday, US stocks had given back most of their gains from Tuesday, when the S&P 500 rose 0.6% to close at a record level. A disappointing report on September employment sparked the rise, as it backed up investor views that the Federal Reserve would maintain its bond-buying efforts into next year.
"A weak payroll report is good for Fed policy, but that still leaves us with a weak report," said Russ Koesterich, global chief investment strategist with BlackRock.
"With a number of economic numbers looking a bit lacklustre over the past few weeks, that calls into question fourth-quarter earnings."
Investors are weighing their positions going into the end of 2013, as corporate earnings season continues and concerns about government dysfunction and Fed policy have retreated. The S&P 500-stock index is up 22% for the year.
"At some point, if you don't see faster earnings growth, [valuations] keep climbing and stocks start to look more expensive," said BlackRock's Mr Koesterich.
Company guidance about coming quarters will be a point of focus, he added, as investors wait to see whether the recent government shutdown dealt a lasting blow to management and consumer confidence.
"We're all trying to read the tea leaves and see how much damage was done," he said.
In earnings news, Caterpillar slumped after the company cut its full-year outlook and reported earnings and revenue that missed analyst estimates, citing weak demand for mining equipment.
Boeing rallied after raising its full-year projection for profits and topping both earnings and revenue growth forecasts, amid strength in its commercial-aircraft business.
Companies in the S&P 500-stock index are on track for 1.6% of third-quarter profit growth from last year, according to FactSet. At the beginning of earnings-reporting season, analysts expected 3% growth. Excluding a surprise quarterly loss from J.P. Morgan Chase, companies would be on pace for 4.1% of quarterly profit growth.
The economic calendar was light. Import prices for September rose 0.2% on the month, in line with economist expectations.
Earlier, the Mortgage Bankers Association said its seasonally adjusted mortgage applications index declined 0.6% in the latest week, as a decline in refinancing activity offset a slight increase in purchase applications.
Treasury prices continued to rise, pushing the yield on the 10-year note down to 2.479% from its three-month settlement low of 2.512% late Tuesday. The dollar edged slightly lower against the euro, and fell to a two-week low against the yen.
In Europe, the Stoxx Europe 600 fell 0.6%, snapping its longest win streak since June 2010. The European Central Bank said it would begin a thorough review of about 130 banks in November to see whether they are healthy enough to withstand another crisis. The central bank will ask European banks to set aside 8% of their risk-adjusted capital as buffers against losses.
Spain's IBEX 35 slid 2.1%, despite news that the country's two-year recession ended in the third quarter.
Separately, the minutes to the Bank of England's last policy-setting meeting suggested the central bank could raise interest rates sooner than anticipated, after officials agreed that the UK jobless rate was falling faster than expected.
Crude-oil futures shed 1.3% to $97.03 a barrel to trade near the lowest level in nearly four months, following data late Tuesday showing crude supplies increased last week. Gold futures lost 0.6% to $1,335 a troy ounce.
Asian markets also fell, as Japanese stocks were pulled down by strength in the yen, which weighed on exporter shares. Japan's Nikkei Stock Average slid 2%. China's Shanghai Composite dropped 1.2%, as interbank lending rates climbed, sparking concerns about liquidity in the country's money markets.
Netflix rose, recouping some the previous session's 9.2% loss. After the close of trading Tuesday, activist investor Carl Icahn disclosed that he decided to cash in on nearly three million shares of the company, more than half of his stake. It closed sharply lower Tuesday despite better-than-expected earnings, after the company's chief executive voiced concerns over its valuation.
Corning soared after the LCD-TV glass maker said it bumped up its stock buyback program by $2 billion and announced several strategic and financial agreements with Samsung Display.
Panera Bread dropped after the casual-dining restaurant chain missed its third-quarter same-store sales target and lowered its fourth-quarter earnings outlook, overshadowing better-than-expected third-quarter earnings.