* Minutes suggest Fed may be getting closer to trimmingstimulus
* October core retail sales show demand picking up
* Dow off 0.4 pct, S&P 500 down 0.4 pct, Nasdaq off 0.3 pct
By Caroline Valetkevitch
NEW YORK, Nov 20 (Reuters) - U.S. stocks fell on Wednesdayafter minutes from the Federal Reserve's last meeting said thecentral bank could begin to scale back its stimulus program atone of its next few meetings.
While Fed officials said such a move would happen only ifeconomic conditions warranted it, some analysts said the minutessuggested the central bank may be getting closer to reducing itsbond-buying program.
Stocks reversed course after the Fed minutes, with all threemajor U.S. stock indexes trading slightly higher just before therelease. Bond yields added to gains.
Wednesday marked the S&P 500's third straight day ofdeclines, with the day's losses fairly broad-based. Nine of the10 index sectors ended lower.
"It does seem a bit more likely, in conjunction with recentremarks from various members of the Fed, to allow for a start toreduced easing somewhat sooner than the market had beenexpecting," said Brad McMillan, chief investment officer ofCommonwealth Financial in Waltham, Massachusetts.
But overall the minutes differ little from previousstatements, he said. Many analysts said they still don't expectthe Fed to change its bond-buying program before the end of thisyear.
The Fed's continued stimulus has largely driven the U.S.stock market's rally this year. The S&P 500 has climbed 25percent so far this year.
The S&P utilities index, down 1.2 percent, and theS&P materials index, down 0.8 percent, ranked amongthe S&P 500's worst-performing sectors during the session.
Among the S&P 500's biggest percentage decliners, homeimprovement chain Lowe's shares slid 6.2 percent to$47.33 after the retailer reported slightly lower-than-expectedquarterly earnings. Lowe's also gave a disappointing outlook forthe fiscal year ending Jan. 31.
The Dow Jones industrial average fell 66.21 points,or 0.41 percent, to end at 15,900.82. The Standard & Poor's 500Index declined 6.50 points, or 0.36 percent, to finish at1,781.37. The Nasdaq Composite Index dropped 10.28points, or 0.26 percent, to close at 3,921.27.
A recent Reuters poll showed economists expected the Fed tobegin reducing its $85 billion in monthly bond purchases byMarch.
In a speech late Tuesday, Fed Chairman Ben Bernanke echoedlast week's dovish comments by his nominated successor, JanetYellen. He said the U.S. central bank will maintain itsultra-easy monetary policy for as long as needed.
Among other recent comments from Fed officials, Dallas FedPresident Richard Fisher told CNBC last week that the Fed'sprogram of buying $85 billion in bonds every month to stimulatethe economy cannot continue forever.
After the bell, shares of Williams-Sonoma climbed5.6 percent to $58.60 following its earnings. The upscale homeproducts retailer, whose brands include Pottery Barn and WestElm, also raised its guidance.
During the regular session, the Dow popped above 16,000 atone point to touch an intraday high of 16,016.85. The blue-chipaverage has traded above 16,000 over the last couple of sessionsbut has failed to close above that level, while the S&P 500 hasbeen unable to close above 1,800.
Analysts said a solid move above those levels could furtherattract investors and money managers eager to chase performance.
The day's economic data offered some proof of upsidemomentum in the economy early in the fourth quarter. Octoberretail sales, excluding automobiles, gasoline and buildingmaterials, or so-called core retail sales, rose 0.5 percent,exceeding expectations.
"We keep getting more and more signs of a graduallyimproving economic situation that leads all to believe that(Fed) easing is going to occur in at least the next six months,probably sooner," said Bryant Evans, investment adviser andportfolio manager at Cozad Asset Management, in Champaign,Illinois.
Among the day's gainers, J.C. Penney shot up 8.4percent to close at $9.44. The stock was the S&P 500's biggestpercentage gainer after the department store operator saidNovember sales were encouraging. Chief Executive Myron Ullmansaid results indicated that a turnaround of J.C. Penney isstarting to "take hold."
Volume totaled about 5.98 billion shares traded on the NewYork Stock Exchange, the Nasdaq and the NYSE MKT, slightly belowthe five-day average closing volume of about 6.05 billion,according to BATS exchange data.
Decliners outnumbered advancers on the NYSE by a ratio of 2to 1. On the Nasdaq, nearly seven stocks fell for every six thatrose.
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