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By Kate Gibson

Stocks fell on Tuesday, with the S&P 500 and the Dow Jones Industrial Average extending losses into a third session, on growing talk that the Federal Reserve will soon cut the stimulus program that has buoyed markets for several months.

"The thought that has emerged since last week is perhaps the numbers are so good the Fed will taper a little sooner," said JJ Kinahan, chief strategist at TD Ameritrade. "Plus, we've been at all-time highs and people want to protect themselves as we head into year-end."

The Dow Jones Industrial Average dropped 94 points, with Pfizer pacing the decline that included 21 of its 30 components.

Materials and financials were the hardest hit, while utilities and consumer staples fared best among the 10 major industry groups on the S&P 500, which was off 5 points. The Nasdaq Composite fell 8 points.

The Chicago Board Options Exchange Volatility Index, a measure of investor uncertainty, rose to a six-week high.

On the New York Mercantile Exchange, gold prices fell to near-five-month lows, and crude-oil futures climbed.

The yield on the 10-year Treasury note fell 2 basis points to 2.78 percent, while the dollar declined against other currencies.

"Ben Bernanke or Janet Yellen will not determine when the Fed tapers," Nick Raich, chief executive officer at the Earnings Scout, wrote in a research note, referring to the chairman of the Fed and his appointed successor. "Instead it will be the bond market. If interest rates spike too much ahead of a taper, there is a great chance economic activity slows, as it did in the summer, and the Fed will be forced to maintain its current level of bond purchases," he added.

The three Detroit automakers and two of Japan's top three reported year-to-year increases in November sales on Tuesday, with aggressive discounting helping propel the numbers well above expectations.

"Investors are unlikely to flinch at any deviations in vehicle sales given the established rebound in auto sales," Andrew Wilkinson, chief economic strategist at Miller Tabak, wrote in emailed commentary.

Tesla Motors jumped after the maker of electric cars said a German probe into recent fires involving its Model S sedan did not uncover any manufacturer-related defects, and Morgan Stanley made the company its top choice in the American auto sector.

Krispy Kreme Doughnuts fell sharply after reporting quarterly revenue beneath expectations. Apple gained after UBS AG recommended purchasing its shares.

On Monday, U.S. stocks fell as investors took a cautious stance ahead of Friday's jobs report while weighing a mixed start to the holiday shopping season and an upbeat gauge of manufacturing.