Updated at 12:20 p.m. ET
NEW YORK Stocks fell on Wall Street Wednesday as investors assessed whether a rally that has pushed stocks to record levels this year has run its course.
The Dow Jones industrial average reversed all of its gain from Tuesday, when it closed at a record high. The index is still on track to end higher for a sixth straight month and is up 16.4 percent this year.
The Standard & Poor's 500 is on an even longer winning streak. The index is headed for a seventh consecutive month of increases, the longest winning streak since 2009. The S&P is up 15.5 percent this year.
After those big gains, investors may be thinking that stocks are due for a pullback, said Sam Stovall, chief U.S. equity strategist for S&P Capital IQ. The S&P 500 has had a decline of at least five percent every year since the end of the World War II, Stovall said. That hasn't happened yet in 2013.
"There's a vacuum of catalysts to continue to push equities higher," Stovall said. "They're now trying to figure out: 'Well, should I now take some profits and sit on the sidelines and then get back in?"
Though investors have been encouraged by positive signs on the economy, including sharp increases reported Tuesday in home prices and consumer confidence, they are also concerned that the Federal Reserve will start to ease back on its stimulus program as the economy improves.
Those concerns pushed the Dow and the S&P 500 to their first weekly decline in five on Friday. Bond yields have also risen sharply this month as traders anticipate that the Fed may slow its bond purchases.
The Fed has been buying $85 billion of bonds each month in an effort to keep interest rates low and encourage borrowing, lending and investing. That stimulus has also been a major factor supporting the rally in the stock market as investors seek alternatives to bonds.
The Dow was down 117 points to 15,290 as of 12:20 p.m. ET. The S&P 500 index fell 13 points to 1,647. The Nasdaq composite dropped 22 points to 3,466.
The yield on the 10-year Treasury note edged down to 2.16 percent from 2.17 percent late Tuesday. The yield surged Tuesday to its highest level in 13 months as investors moved money out of bonds. The yield has risen sharply from 1.63 percent at the beginning of the month.
The increase in bond yields in May has prompted investors to sell stocks which pay high dividends, like utilities and phone companies. Those two groups, which many traders seeking income bought as an alternative to bonds, fell 2 percent Wednesday, the biggest declines of the 10 industry groups in the S&P 500. Those groups are also down the most so far this month: Utilities have lost 10 percent in May, phone companies 5.6 percent.
Stock market volatility is starting increase. The Chicago Board of Exchange's VIX index, a measure of price volatility on the S&P 500 index, jumped 7.9 percent Wednesday, its biggest increase in more than a month.
In commodities trading, the price of crude oil fell $1.50, or 1.6 percent, to $93.55. Gold rose $8, or 0.6 percent, to $1,386.80 an ounce. The dollar fell against the euro and the Japanese yen.
There were no major economic reports scheduled on Wednesday.
Among stocks making big moves:
- Smithfield Foods surged $6.51, or 25 percent, to $32.49 after the company agreed to be acquired by meat processor Shuanghui International Holdings for approximately $4.72 billion.
- Stewart Enterprises rose $3.33, or 34 percent, to $13.08 after the funeral company agreed to be acquired by Service Corp International for $1.1 billion in cash.
- Sallie Mae jumped $1.04, or 4.6 percent, to $23.98, the biggest gain in the S&P 500 index. The company, which is formally named SLM Corp., announced a plan to split into two separate companies, one that manages student loans and a consumer banking business.
- Michael Kors Holdings rose 89 cents, or 1.6 percent, to $62.87 after the fashion company reported that its profit more than doubled on surging sales in the fourth quarter, capping another strong year for the upscale handbag maker.