By Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks on Wednesday fell for a third day, as uncertainty over the timing of cuts in the Federal Reserve's monthly bond buys had equities retreating from recent highs.

"Even raging bull markets get 10% to 15% pullbacks along the way," so a retreat that this week has stocks down about 1% is unremarkable, given the market's double-digit rise so far this year, said Doug Foreman, co-chief investment officer at Kayne Anderson Rudnick.

Off session lows that had it down 97 points, the Dow Jones Industrial Average (DJI) closed down 48.07 points, or 0.3%, at 15,470.67.

The Dow ended last week at an all-time high of 15,658.36.

Bank of America Corp. (BAC) was among the blue-chip decliners, off 0.8%, a day after the Justice Department filed suit against the bank for allegedly misleading investors about loans linked to mortgage-backed securities.

Also weighing on the Dow, Walt Disney Co. (DIS) declined 1.7% after the entertainment company reported fiscal third-quarter profit little changed from the year-ago period.

The S&P 500 index (SPX) shed 6.46 points, or 0.4%, to 1,690.91, with consumer discretionary falling hardest among its sectors. The S&P 500 on Friday closed at a record 1,709.67.

"We've enjoyed a strong seasonal tailwind the last few months that's going to turn into a headwind in what is typically a weak season for stocks. Plus, corporate earnings for the second quarter were basically flat," said Bittles.

The Nasdaq Composite (RIXF) declined 11.76 points, or 0.3%, to 3,654.01.

For every share gaining, two fell on the New York Stock Exchange, where 629 million shares traded. Composite volume surpassed 3 billion.

The market's retreat is "attributable to comments made yesterday by [Fed Bank of Chicago President] Charles Evans regarding the possibility of tapering beginning in September," said Matthew Kaufler, portfolio manager at Federated Investors. "There's a certain contingent in the market that doesn't want to see quantitative easing end, and thinks QE is the primary pillar that the market is resting on," he noted.

The S&P 500 index declined 0.6% on Tuesday after Evans said the central bank could start easing its asset buys as soon as September.

"I personally would be very pleased once tapering begins and hopefully continues to its proper conclusion. As a largely capitalistic society, we want our institutions to stand on their own two feet, so the quicker we can get back to that, the better off we'll be," Kaufler added.

The market is overbought after a six-week run higher, but much of the fretting over the Fed's monetary moves is already priced in, which is "why this decline shouldn't carry that far," said Bruce Bittles, chief investment strategist at R.W. Baird & Co.

And while Bittles concurred with the view that equities are reacting to the idea of Fed "tapering in September," he doesn't think the central bank will reduce stimulus this year, given the still weak labor market.

"Most of the jobs created this year are part-time, that's why I say I think the economy is still suspect," he said. Read another view from Goldman Sachs on September tapering.

Benchmark indexes remained modestly lower after Sandra Pianalto, president of the Cleveland Fed Bank, on Wednesday afternoon said the Fed could begin scaling back its asset purchases as long as the labor market continues to strengthen.

"Add Cleveland non-voting Fed member Pianalto to the now growing list of those that are telling the market that tapering is likely coming (she though didn't specify timing like some others did) assuming the data continues to come in as they expect," said Peter Boockvar, chief market analyst at the Lindsey Group, in emailed commentary.

The dollar (DXY) edged lower against the currencies of major U.S. trading partners including the yen (USDJPY), while Treasury prices rose, lowering the yield on the 10-year note by 4 basis points to 2.603%.

Oil prices slipped, with the September crude futures (CLU3) contract down 93 cents, or 0.9%, at $104.37 a barrel on the New York Mercantile Exchange.

Gold futures rose modestly to halt a six-session drop, with futures for December delivery (GCZ3) up $2.80, or 0.2%, to $1,285.30 an ounce on the Comex.

First Solar Inc. (FSLR) fell more than 13% after the solar-panel manufacturer reported a profit drop in the second quarter.

Zillow Inc.'s (ZILLOW.XX) shares dropped 7.7% after the real-estate information site reported a second-quarter loss. Read Wednesday's Movers & Shakers.

Time Warner Inc. (TWC) fell 0.4% after the entertainment provider reported larger-than-expected quarterly revenue.

AOL Inc. (AOL) shares gained 1.4% after the Internet company reported better-than-expected revenue for the second quarter and said it would buy Adap.tv, a video advertising platform, for $405 million.

Ralph Lauren Corp. (RL) declined 8.6% after the clothing retailer projected quarterly profit beneath estimates. (Read more in Behind the Storefront: http://blogs.marketwatch.com/behindthestorefront/2013/08/07/ralph-lauren-results-shock-spoiled-investors/.)

Computer Sciences Corp. (CSC) rose 8.5% a day after the technology consultant hiked its earnings outlook.

Green Mountain Coffee Rosters Inc. (GMCR) is among the companies reporting after Wednesday's close, with analysts expecting strong results from the maker of Keurig coffee makers and K-Cup single-servicing coffee pods. Read about the company's competitive edge.

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