Wall St falls on lingering worry over stimulus cuts

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks fell on Wednesday, with the Dow tumbling more than 100 points on a wildly volatile day as traders extended a selloff driven by concern about the winding down of central banks' stimulus measures.

The S&P 500 was caught between support near its 50-day moving average and resistance at the 14-day moving average. The S&P 500 has closed below its 50-day moving average only once this year - in mid-April.

Traders have kept their focus on the possibility that the Federal Reserve will reduce its monthly bond purchases in coming months, removing one of the pillars of the U.S. stock market's rally this year.

These worries have sparked volatility and triggered a pullback in stock indexes from historic highs.

The Dow on Wednesday moved more than 200 points for the seventh time in the past 15 trading days, going back to Fed Chairman Ben Bernanke's latest congressional testimony on May 22. At the time, he hinted that the Fed may begin to reduce its quantitative easing - consisting of $85 billion a month in bond purchases - in the coming months.

"There are concerns about the path for the Fed and the markets that benefited from QE and how those trades will unwind," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.

"The level of uncertainty has gone up tremendously in the last month."

The CBOE Volatility Index, known as the VIX, shot up 8.4 percent to 18.50. The VIX has jumped more than 20 percent so far this week.

Zemsky said the perception of increased risk may be forcing large market players like hedge funds to sell, putting additional downward pressure in stocks.

The Dow Jones industrial average fell 114.58 points or 0.76 percent, to 15,007.44. The S&P 500 lost 12.64 points or 0.78 percent, to 1,613.49. The Nasdaq Composite dropped 36.63 points or 1.07 percent, to 3,400.32.

The S&P 500 has fallen about 3.4 percent from its record closing high of 1,669.16 set on May 21. The S&P 500's 10 major sectors were lower for the day, led by consumer discretionary and financial stocks.

American Express Co , down 2.1 percent at $74.92, was the Dow's biggest percentage decliner.

In contrast, Hewlett-Packard was the biggest percentage gainer among the blue chips after its chief executive said revenue growth was "still possible" in fiscal 2014. The computer maker's stock jumped 2.8 percent to $24.92.

Going against the market's slide was Cooper Tire & Rubber . The stock surged 40.6 percent to $34.52 after India's Apollo Tyres agreed to buy the second-biggest U.S. tire maker for about $2.5 billion.

(Editing by Jan Paschal)