Stocks slipped, as investors hit pause after a pair of disappointing economic readings from the U.S. and ahead of two key global monetary-policy announcements.
The Dow Jones Industrial Average lost 58 points, or 0.4%, to 14605.
The Standard & Poor's 500-stock index shed nine points, or 0.6%, to 1561, and the Nasdaq Composite Index pulled back 15 points, or 0.5%, to 3239.
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On Tuesday, the Dow and the S&P 500 both rose to record highs for the second time in three sessions. But market watchers were concerned that recent trading action didn't indicate strong investor conviction in the rally.
"The rally's leadership is limited to a smaller and smaller number of names," said Julius Ridgway, investment adviser at Medley & Brown LLC, in Jackson, Miss. "It seems to be getting a little narrower."
The Russell 2000, an index of small stocks, slid more steeply than other benchmarks, pulling back 1%.
Stocks extended losses after the Institute for Supply Management's reading on the U.S. nonmanufacturing sector came in worse than expected�slipping to its lowest level since August 2012�and employment slowed as well.
A disappointing report on private-sector jobs growth for March also cast a pall on Tuesday's optimism. Data compiled by Automatic Data Processing and Moody's Analytics showed an increase of 158,000 jobs on the month, well below the 192,000 expected.
The measure is seen as a preview to Friday's closely watched employment report from the Bureau of Labor Statistics.
"Investors are trying to interpret all of this economic data. At the same time, they're looking for the opportunity to take a bit of a breather" after the latest rally, said Joseph Tanious, global market strategist at J.P. Morgan Funds.
But Mr. Tanious remains positive on the U.S. economy. He said that the private-sector jobs report doesn't guarantee a disappointment come Friday's employment measure, and said that the long-term trend of data indicates the economy is growing at a steady clip.
"We would view the selloff to be a buying opportunity," he said.
Next on investors' radars will be monetary-policy decisions abroad. The European Central Bank and the Bank of Japan are both slated to announce policy moves on Thursday.
"All eyes will be focused on what both of those central banks are going to do in their efforts to stimulate economic growth ... their actions may dominate" market action, Mr. Tanious said.
European markets slid, with the Stoxx Europe 600 down 0.9% as investors took to the sidelines ahead of monetary-policy announcements by the ECB and the Bank of England.
In Asia, most markets edged lower, although Japan's Nikkei Stock Average bucked the regional trend by surging 3% ahead of a policy announcement by the Bank of Japan on Thursday. Additional easing measures are expected to be announced.
Meanwhile, China's Shanghai Composite slipped 0.1% and Australia's S&P ASX 200 lost 0.6% following disappointing home-sales data.
May crude-oil futures fell 1.9% to $95.35 a barrel, and April gold futures declined 0.5% to $1,567.80 a troy ounce. The dollar lost ground against both the euro and the yen. Demand rose for the benchmark 10-year U.S. Treasury note, pushing yields down to 1.831%.
Zynga rallied ahead of the rollout of two real-money casino and poker games in the next few days.
U.S.-listed shares of Vodafone pulled back after Verizon Communications said it doesn't plan to merge with or make a bid for the U.K.-based telecommunications company. Verizon shares also fell.
Write to Alexandra Scaggs at alexandra.scaggs@dowjones.com
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