* Minutes suggest Fed may be getting closer to trimming stimulus
* 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 Wednesday after minutes from the Federal Reserve's last meeting said the central bank could begin to scale back its stimulus program at one of its next few meetings.
While Fed officials said such a move would happen only if economic conditions warranted it, some analysts said the minutes suggested the central bank may be getting closer to reducing its bond-buying program.
Stocks reversed course after the Fed minutes, with all three major U.S. stock indexes trading slightly higher just before the release. Bond yields added to gains.
Wednesday marked the S&P 500's third straight day of declines, with the day's losses fairly broad-based. Nine of the 10 index sectors ended lower.
"It does seem a bit more likely, in conjunction with recent remarks from various members of the Fed, to allow for a start to reduced easing somewhat sooner than the market had been expecting," said Brad McMillan, chief investment officer of Commonwealth Financial in Waltham, Massachusetts.
But overall the minutes differ little from previous statements, he said. Many analysts said they still don't expect the Fed to change its bond-buying program before the end of this year.
The Fed's continued stimulus has largely driven the U.S. stock market's rally this year. The S&P 500 has climbed 25 percent so far this year.
The S&P utilities index, down 1.2 percent, and the S&P materials index, down 0.8 percent, ranked among the S&P 500's worst-performing sectors during the session.
Among the S&P 500's biggest percentage decliners, home improvement chain Lowe's shares slid 6.2 percent to $47.33 after the retailer reported slightly lower-than-expected quarterly earnings. Lowe's also gave a disappointing outlook for the 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 500 Index declined 6.50 points, or 0.36 percent, to finish at 1,781.37. The Nasdaq Composite Index dropped 10.28 points, or 0.26 percent, to close at 3,921.27.
A recent Reuters poll showed economists expected the Fed to begin reducing its $85 billion in monthly bond purchases by March.
In a speech late Tuesday, Fed Chairman Ben Bernanke echoed last week's dovish comments by his nominated successor, Janet Yellen. He said the U.S. central bank will maintain its ultra-easy monetary policy for as long as needed.
Among other recent comments from Fed officials, Dallas Fed President Richard Fisher told CNBC last week that the Fed's program of buying $85 billion in bonds every month to stimulate the economy cannot continue forever.
After the bell, shares of Williams-Sonoma climbed 5.6 percent to $58.60 following its earnings. The upscale home products retailer, whose brands include Pottery Barn and West Elm, also raised its guidance.
During the regular session, the Dow popped above 16,000 at one point to touch an intraday high of 16,016.85. The blue-chip average has traded above 16,000 over the last couple of sessions but has failed to close above that level, while the S&P 500 has been unable to close above 1,800.
Analysts said a solid move above those levels could further attract investors and money managers eager to chase performance.
The day's economic data offered some proof of upside momentum in the economy early in the fourth quarter. October retail sales, excluding automobiles, gasoline and building materials, or so-called core retail sales, rose 0.5 percent, exceeding expectations.
"We keep getting more and more signs of a gradually improving 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 and portfolio manager at Cozad Asset Management, in Champaign, Illinois.
Among the day's gainers, J.C. Penney shot up 8.4 percent to close at $9.44. The stock was the S&P 500's biggest percentage gainer after the department store operator said November sales were encouraging. Chief Executive Myron Ullman said results indicated that a turnaround of J.C. Penney is starting to "take hold."
Volume totaled about 5.98 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, slightly below the 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 2 to 1. On the Nasdaq, nearly seven stocks fell for every six that rose.