US STOCKS-Wall St falls as budget deal sets off Fed taper worry
* U.S. budget deal gets tentative approval
* LabCorp tumbles after outlook
* Costco shares drop after profit misses estimates
* Dow down 0.6 pct; S&P 500 off 0.8 pct; Nasdaq down 1 pct
By Chuck Mikolajczak
NEW YORK, Dec 11 (Reuters) - U.S. stocks slid on Wednesday after legislators in Washington reached a provisional budget deal, which increased investor expectations that the U.S. Federal Reserve may wind down its stimulus in the coming months.
The bipartisan agreement, reached late Tuesday, would end three years of impasse and fiscal instability in Washington that culminated in October with a partial government shutdown.
But while the deal removes a large overhang of uncertainty for markets, it may also increase the possibility that the Fed may soon scale back its $85 billion-a-month stimulus that has fueled a stock market rally of nearly 26 percent this year.
In September, Fed Chairman Ben Bernanke cited tight fiscal policy as one concern when the central bank surprised market participants by keeping the stimulus intact. A budget showdown in Congress ultimately led to a partial government shutdown in October.
The Fed's final policy statement of the year is expected on Dec. 18, at the end of its two-day meeting, its last in 2013.
"There is some profit taking, but also there is always going to be fear about what the Fed is going to do," said Randy Warren, chief investment officer of Warren Financial Service in Exton, Pennsylvania.
"The market is always concerned they are going to get the timing and the quantity wrong."
The Dow Jones industrial average fell 88.65 points or 0.55 percent, to 15,884.48. The S&P 500 slid 13.95 points or 0.77 percent, to 1,788.67. The Nasdaq Composite dropped 40.211 points or 0.99 percent, to 4,020.279.
In company news, MasterCard Inc announced a 10-for-1 stock split and a new $3.5 billion stock-buyback program. MasterCard also raised its quarterly dividend by 83 percent to $1.10 per share. The news drove the stock up 3.8 percent to $792.94.
Laboratory Corp shares tumbled 10.6 percent to $88.64 after the medical testing company cut the lower end of its full-year adjusted earnings forecast. The stock of rival Quest Diagnostics lost 5 percent to $55.65.
Costco Wholesale Corp shares slipped 0.5 percent to $119.42 after the warehouse club operator's first-quarter profit missed Wall Street's estimates because of lower gasoline prices and weak foreign currencies.
Mining equipment maker Joy Global Inc forecast 2014 earnings below analysts' estimates after reporting a quarterly profit that fell short of expectations as miners cut spending. The stock fell 6.4 percent to $52.65.
