Stocks added to losses Wednesday, following a report that showed private employers added less jobs than expected in March and the U.S. services sector showed the weakest growth in seven months.
(Read More: Retail Investors Are Back! But Don't Hit 'Sell' Just Yet)
The Dow Jones Industrial Average declined, led by Bank of America and General Electric, after hitting fresh intraday and closing highs in the previous session.
The S&P 500 and the Nasdaq also traded lower. If the S&P 500 closes lower, it will have alternated between gains and losses for the 10th consecutive session. The last time the index saw such a pattern was in April 2002.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 13.
Most key S&P sectors turned lower, led by financials and energy.
On the economic front, the rate of growth in the services sector slowed in March to the lowest level since August. The Institute for Supply Management said its services index fell to 54.4 last month from 56 in February, falling short of economists' forecasts for 55.8. A reading above 50 indicates a sector expansion.
U.S. private employers added 158,000 jobs in March, falling short of economists' expectations for a gain of 200,000, according to payrolls processor ADP. February's private payrolls figure was revised up to an increase of 237,000 from the previously reported 198,000.
The ADP report comes ahead of the widely-followed government non-farm payrolls report, due Friday. Economists expect to see a gain of 200,000, with the unemployment rate steady at 7.7 percent, according to a Reuters poll.
Earlier, the Mortgage Bankers Association reported that home loan applications dipped 4 percent last week due mainly to a decline in refinancing.
European markets were lower as Italy's political impasse continues and President Giorgio Napolitano's team of "wise men" attempted to formulate reform measures that can gain cross-party consensus.
(Read More: Italy's Bersani Drops Leadership Bid)
Vodafone slumped after Verizon Communicationsdenied earlier reports that it is looking to partner with AT&T to acquire British cellphone company Vodafone. However, the Dow component said it would be a willing buyer of Vodafone's current 45-percent share of Verizon's wireless venture.
Zynga soared after the social gaming company said it would begin offering real-money poker and casino-style games in the UK in the next few days.
Among earnings, ConAgra declined after the packaged foods company reported a 57 percent drop in earnings, hurt by costs related to its acquisition of Ralcorp.
Meanwhile, Monsanto gained after the seed company boosted its full-year profit guidance after reporting better-than-expected quarterly results thanks to strength in its global corn business.
Late on Tuesday, one of the Federal Reserve's most hawkish officials publicly locked horns with one of its most dovish, in a debate over the risks posed to inflation by the central bank's bold steps to spur growth. Policy dove Charles Evans, president of the Federal Reserve Bank of Chicago, said the Fed was still "missing tremendously" on the employment side of its dual mandate, while inflation remains well under its 2 percent goal.
(Read More: Fed Hawk Lacker and Dove Evans Face Off Over Inflation)
Crude oil inventories will be released at 10:30 am ET.
Meanwhile, the Nikkei 225 surged 3 percent on hopes that aggressive monetary stimulus measures will be announced at the Bank of Japan's policy meeting on Thursday. Central bank governor Haruhiko Kuroda is expected to substantially boost asset purchases,as well as buy longer-dated government bonds and commit to the open-ended purchase of assets.
?By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
? 2013 CNBC LLC. All Rights Reserved
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