The S&P 500 fell for a fourth day on Wednesday, weighed down by disappointing news from Chevron and Alcoa as earnings season got under way.

Chevron (CVX.N) shares dropped 4.2 percent to $112.45 after it said third-quarter profits would be "substantially lower" than the previous quarter, while Alcoa (AA.N) fell 4.6 percent to $8.71 after it posted a quarterly loss. The company cut its outlook for global aluminum demand, citing a slowdown in China.

Both stocks are Dow components, and the blue-chip average posted its biggest daily percentage drop since early July.

"The market is worried about what is going to happen with earnings," said Randy Warren, chief investment officer of investment advisory firm Warren Financial Service in Exton, Pennsylvania.

"All expectations are for a softening."

The market continues to focus on weak global demand as S&P 500 companies' third-quarter earnings are expected to fall 2.9 percent from a year ago, according to Thomson Reuters data. It would be the first decline in three years.

Stocks briefly trimmed losses after the Federal Reserve's Beige Book showed the overall economy had expanded modestly, with most districts seeing strengthened home sales in the last month.

The Dow Jones industrial average .DJI fell 128.56 points, or 0.95 percent, to end at 13,344.97. The S&P 500 .SPX dropped 8.92 points, or 0.62 percent, to 1,432.56. The Nasdaq Composite .IXIC lost 13.24 points, or 0.43 percent, to end at 3,051.78.

The declines in the Dow and the S&P 500 were partially offset by gains in Wal-Mart Stores Inc (WMT.N), which hit an all-time high, and FedEx Corp (FDX.N), which posted its largest daily advance this year.

Wal-Mart shares climbed 1.7 percent to $75.42 after hitting an all-time high of $76.81 as it cited strong sales at its U.S. grocery stores and a big start to holiday layaway sales in its annual meeting with analysts and investors.

FedEx rose 5.2 percent to $89.99, its largest daily percentage jump this year, as the package delivery company laid out plans to sharply cut costs at two divisions, seeking to improve profits there by $1.7 billion over the next four years.

Yum Brands (YUM.N) shares climbed 8 percent to $70.99 as the parent company of KFC, Taco Bell and other fast-food restaurant chains raised its full-year profit forecast.

Warehouse chain Costco Wholesale (COST.O) also hit a record high at $104.43 after it reported a jump in quarterly profit. Shares closed at $101.56, up 1.9 percent.

Engine maker Cummins Inc (CMI.N) lowered its 2012 forecast for a second time this year and its shares dropped 3.4 percent to $87.79.

About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.53 billion shares.

On the NYSE, roughly eight issues fell for every five that rose. On the Nasdaq, six shares declined for every five that advanced.