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US stocks fall again on Fed tapering fears

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US stocks have fallen for a second day in a row as speculation increased that the US Federal Reserve will soon scale back its bond-buying program.

The Dow Jones Industrial Average fell 94.15 points (0.59 per cent) to 15,914.62.

The broad-based S&P 500 dipped 5.75 (0.32 per cent) to 1,795.15, while the tech-rich Nasdaq Composite Index declined 8.06 (0.20 per cent) to 4,037.20.

The sell-off came as investors focused on prospects that the Fed may trim its $US85 billion-per-month bond-buying program earlier than previously believed, perhaps at its monetary policy meeting in two weeks time.

That speculation picked up following strong economic data on Monday, a dearth of major economic news on Tuesday and ahead of a big US labour report on Friday that many feel could hasten Fed action if jobs growth is strong.

The markets are falling because of “more taper fears” as economic data improves, said Brent Schutte of BMO Private Bank.

Dow component Pfizer fell 1.9 per cent after Goldman Sachs removed it from its “conviction buy” list. Goldman said it sees less upside for Pfizer in light of its rise in value, Barrons.com reported.

GM reported a 14 per cent rise in November auto sales, yet shares fell 2.5 per cent. Rival automaker Ford posted its best November performance since 2004, but shares declined 2.9 per cent.

Technology giant Apple jumped 2.7 per cent following a Wall Street Journal report that it acquired social media analytics firm Topsy Labs for more than $US200 million. Separately, a Jefferies note cited anecdotal evidence that suggested Apple had a “great” Black Friday weekend.

Electric-car company Tesla Motors soared 16.5 per cent after it reported that German authorities had cleared it in a safety probe. Separately, Morgan Stanley said the US upstart is its “top pick” among 26 names in the US auto sector.

Fast-food chain Yum Brands lost 2.7 per cent after reporting a one per cent increase in same-store sales in China, but noting that the increase was fueled in part by a one-time promotion at its Kentucky Fried Chicken chain. The company pledged a “strong bounceback” in 2014 “following a year that is clearly below our high expectations”.

Bond prices rose. The yield on the 10-year US Treasury dipped to 2.78 per cent from 2.80 per cent Monday, while the 30-year declined to 3.84 per cent from 3.86 per cent. Bond prices and yields move inversely.