JPMorgan Chase & Co slipped 3.5 percent to USD 32.04 as the biggest drag on the Dow, after the first major US bank to announce third-quarter earnings said they fell 4 percent as the European debt crisis pushed investment banking clients to the sidelines. The KBW Bank index shed 2.2 percent.
China's trade surplus, in a reflection of global economic weakness and domestic cooling, narrowed for a second straight month in September as both imports and exports were lower than expected.
"(JPMorgan) is kind of a lead into earnings, a little bit better than expected, but it really wasn't a knock your socks off number either, so it's not going to sway the market too much," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
"You probably are seeing a little bit of profit taking, but nothing too dramatic."
The S&P 500 has run up 11.4 percent from its intraday low hit last week on Tuesday and had its largest seven-day rally since March 2009 on growing optimism European leaders were making progress in tackling the region's debt problems.
The Dow Jones industrial average was down 104.52 points, or 0.91 percent, at 11,414.33. The Standard & Poor's 500 Index was down 12.31 points, or 1.02 percent, at 1,194.94. The Nasdaq Composite Index was down 10.93 points, or 0.42 percent, at 2,593.80.
On the US economic data front, new claims for jobless benefits were little changed last week and the trade deficit narrowed marginally in August, indicating a modest improvement in the economy.
Google is reporting third-quarter earnings after the close and investors will be looking to see how the slowing economy is impacting its advertising business.
A report on Wednesday that Akamai Technologies Inc was close to being acquired by Google has no merit, a person familiar with the matter said. Akami shares were up 4.1 percent to USD 24.32 and Google edged up 0.15 to USD 549.31.