Once again Janet Yellen very clearly states the Fed's intentions as she has done any number of times before:  interest rates will go up when there is solid evidence the economy is improving.  Even though the statements are quite consistent, every time one is issued the market reacts like it's never heard it before, sometimes with cheers, sometimes with jeers.  With all the good news lately, even the greatest skeptics have to admit the economy is up so today it was jeers -- and the Dow sank 50 points.  Not that 50 points is a big deal but it has been taken as an indication that the big five-day rally is over and the market now braces for a December rate hike.  Even today's employment numbers were very encouraging showing a steady pace of hiring in October.  Friday comes the payroll report, the most widely followed indicator.  Volume was very healthy at 7.4 billion.

Markets | Wed Nov 4, 2015 4:43pm EST

Wall St. ends down after energy slide, Yellen comments

BY CAROLINE VALETKEVITCH

DJ:  17,867.58  -50.57         NAS:  5,142.58  -2.65         S&P:  2,102.31  -7.48

REUTERS/BRENDAN MCDERMID

U.S. stocks edged lower on Wednesday, retracing recent gains along with energy shares, while comments by Federal Reserve Chair Janet Yellen pointing to a possible rate hike in December added to investor caution.

S&P energy .SPNY, down 1.0 percent, led the day's decline.

The fall snapped a run of five straight days of gains for the index, with shares of Chevron (CVX.N) down 1.4 percent at $96.77 and Exxon Mobile (XOM.N) down 1.0 percent at $85.98.

Stocks added to losses after Yellen's comments, which caused investors to reset their expectations of a December rate hike above 60 percent.

Yellen said December remains a "live possibility" for a rate increase, and William Dudley, the president of the New York Fed and a permanent voting member of the Fed's policy panel, said later on Wednesday that he would "completely agree" with Yellen.

Still, S&P utilities .SPLRCU, which tend to fall in a higher-interest rate environment, were up 0.4 percent, the day's best-performing sector.

The market is consolidating after a big rally, said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

"The gains have been strong over the past five weeks and we're due for more of a breather here," said O' Rourke.

The Dow Jones industrial average .DJI fell 50.57 points, or 0.28 percent, to 17,867.58, the S&P 500 .SPX lost 7.48 points, or 0.35 percent, to 2,102.31 and the Nasdaq Composite.IXIC dropped 2.65 points, or 0.05 percent, to 5,142.48.

Stocks rallied after the Fed's statement last week, when it signaled a December rate hike was still on the table, yet the ongoing debate over when the Fed will actually make its move has added uncertainty to the market.

"It's really that uncertainty - investors don't know whether to applaud a rate hike or to fear it," said Bruce Zaro, chief technical strategist, Bolton Global Asset Management in Boston.

A raft of data on Wednesday suggested the economy was strong enough to support ending an era of near-zero interest rates.

The ADP National Employment Report showed U.S. private employers maintained a steady pace of hiring in October, while data from the Institute for Supply Management showed a jump in new orders buoyed activity in the services sector.

The reports come ahead of nonfarm payrolls data on Friday, the most widely watched U.S. economic indicator.

Time Warner (TWX.N), down 6.6 percent at $72.20, weighed on the S&P 500 the most after the company said ratings for its "key" domestic entertainment networks have dropped more than anticipated, while shares of Twenty-First Century Fox Inc (FOXA.O) dropped 5.2 percent to $29.65 after it reported lower-than-expected quarterly revenue.

Other media stocks such as Disney (DIS.N), Viacom (VIAB.O) and Discovery (DISCA.O) also fell.

U.S. health insurers also slid, with UnitedHealth (UNH.N), down 2.6 percent at $114.64, the biggest drag on the Dow after

Groupon (GRPN.O) slumped 26.3 percent to $2.97 after it forecast weak fourth-quarter and 2016 revenue.

Declining issues outnumbered advancing ones on the NYSE by 1,849 to 1,214, for a 1.52-to-1 ratio on the downside; on the Nasdaq, 1,398 issues fell and 1,362 advanced for a 1.03-to-1 ratio favoring decliners.

The S&P 500 posted 16 new 52-week highs and 1 new low; the Nasdaq recorded 69 new highs and 43 new lows.

Note:  Per BATS, today’s volume was a very healthy 7.4 billion.