US stocks fall for a third straight day

The stock market fell to its lowest level in a month Thursday as investors worried that the end may be nearing for the Federal Reserve's support for the economy.

The Fed's stimulus efforts have been a key factor in the bull market that has pushed the Standard & Poor's 500 index almost 25 percent higher this year. Investors know it will end. But the timing, and the fallout, are uncertain.

Until this month, stocks had risen for eight weeks straight. The S&P 500 set a record high as recently as Monday. But stocks posted their biggest declines since Nov. 7 on Wednesday, and dropped further Thursday.

The Dow Jones industrial average closed down 104.10 points, or 0.66 percent, at 15,739.43. The S&P 500 fell 6.72 points, or 0.38 percent, to 1,775.50. The Nasdaq composite dropped 5.41 points, or 0.14 percent, to 3,998.40.

The Dow is still up 20 percent this year, and the Nasdaq has risen 32 percent.

"We don't think we're in a bubble, however, we do know we're in an expensive market," said Marty Leclerc, chief investment officer and portfolio manager at Barrack Yard Advisors.

Leclerc said stocks have risen faster than earnings over the past couple of years, so it "wouldn't be unusual to have a step backward even in the confines of a bull-market run."

In economic news, the number of people seeking unemployment benefits rose to about where it was before the recession. Also, U.S. shoppers spent more money on appliances, furniture, and cars in November.

Social networking stocks continued to be strong. Facebook jumped $2.45, or 5 percent, to $51.83 after the stock was added to the S&P 500 index. Twitter rose $2.99, or almost 6 percent, to $55.33.

Lululemon Athletica plunged $7.96, or almost 12 percent, to $60.39 after the upscale yoga clothing maker said sales will be flat in the next quarter and revenue for the year will be less than it had predicted. Several gaffes have hurt sales of its $100 yoga pants and other products. In the spring Lululemon pulled some of its pants from stores after complaints that they became see-through. Two days ago, founder Chip Wilson stepped aside as chairman, and the company named a new CEO.

Airlines rose, led by Southwest Airlines Co., which gained 82 cents, or 4.6 percent, to $18.79 after an upgrade by an analyst at Bank of America Merrill Lynch. United Continental Holdings Inc. rose $1.04, or 3 percent, to $37.62.

Networking company Ciena fell $1.59, or 7 percent, to $21.31 after quarterly earnings and its first-quarter outlook came in lower than expected.

Six of the 10 industry groups in the S&P 500 declined. The biggest losses were in consumer staples, technology, and health care stocks.

The yield on the 10-year Treasury note rose to almost 2.88 percent from 2.85 percent on Wednesday.