The stock market suffered its first three-day losing streak since late September, an indication that share prices may have gotten ahead of themselves in this year's furious rally.
The Dow Jones industrial average slid below 16,000 as portfolio managers appeared to lighten their holdings to lock in annual gains.
The nation's most-watched barometer for stocks slipped 94.15 points, or 0.6%, to 15,914.62. Meanwhile, the broader Standard & Poor's 500 index dipped below 1,800, sagging 5.75 points, or 0.3%, to 1,795.15.
The mini sell-off comes on the heels of a powerful burst that had carried the Dow up more than 1,300 points in two months, one of its best rallies in years.
Professional market watchers have begun urging investors to proceed cautiously, saying the market is overdue for a setback by early next year.
"What goes up at some point must come down," said John Linehan, head of U.S. equities at mutual-fund giant T. Rowe Price. "At some point in 2014, we're probably due."
Since 1928, the average bull market has lasted 57 months and lifted the S&P 500 by 165%, according to T. Rowe research. Through its peak last Wednesday, the current bull market has run 57 months and pushed the index up 167%.
This year, the Dow has risen 21.5% while the S&P has gained almost 26%. The Nasdaq composite index has jumped nearly 34%.
"We're aging gracefully so far," said Bill Stromberg, head of equity at T. Rowe Price. "But there's reason to worry."
Economic data have been mixed lately, sparking debate about when the Federal Reserve will begin to taper its economic-stimulus campaign.
Strong manufacturing data released Monday raised the prospect that the central bank could begin to taper its monthly purchases of Treasury and mortgage bonds sooner than expected.
That is viewed as a mixed blessing on Wall Street. It shows the economy may be strong enough to stand on its own. But there is concern that the economy and stock market could falter if the central bank pulls back.
Bond guru Bill Gross warned Tuesday that easy-money policies by the Fed and other central banks have left the U.S. and other economies "increasingly at risk."
"Investors are all playing the same dangerous game that depends on a near perpetual policy of cheap financing and artificially low interest rates in a desperate gamble to promote growth," the co-chief investment officer at Pacific Investment Management Co., or Pimco, wrote in his monthly investment commentary.
Thus far, the crucial holiday shopping season has been unimpressive, raising doubts about consumer confidence and Americans' willingness to spend.
Online sales during the so-called Cyber Monday shopping event broke records, but overall revenue from the preceding Black Friday weekend dipped from last year.
Despite concerns about the intensity of this year's rally, many market watchers say stocks aren't in a bubble.
Russ Koesterich, chief investment strategist at financial giant BlackRock Inc., said the Nasdaq composite index is still far from its frothy level during the dot-com boom more than a decade ago.
The tech-focused Nasdaq is trading at roughly 24 times its previous 12 months' earnings, Koesterich said in a note.
But that's lower than the Nasdaq's 18-year median of 30 times earnings and far below the 150-times-earnings level it was trading at when the index first crossed 4,000 in 1999, he said.
"Today is not 1999, and stocks are not in a broad market bubble," Koesterich said.
Staff writer Jim Puzzanghera contributed to this report.