US STOCKS-Wall St drops on worry about timing of stimulus cuts
* All eyes to stay on central bank policy
* S&P utilities and financial sectors lead the decline
* Dow off 0.5 pct; S&P 500 down 0.5 pct; Nasdaq off 0.7 pct
By Angela Moon
NEW YORK, June 12 (Reuters) - U.S. stocks fell on Wednesday in another volatile session as investors extended a recent selloff that has been driven by the unwinding of bullish bets built on supportive policy from the world's largest central banks.
The day started off relatively strong after recent declines, but U.S. stock indexes turned negative in late morning trade following more weakness in the U.S. dollar against the yen, which has driven much of the activity of late.
Investors are concerned that the Federal Reserve will reduce its monthly bond buying in coming months, removing a leg of support that has kept interest rates low and helped drive the U.S. stock market's rally this year.
Worries that the Fed may reduce its stimulus efforts have kept investors nervous for weeks, triggering wider intraday swings. The Dow has moved around 200 points so far for the day. In seven of the 15 trading days since Fed Chairman Ben Bernanke's testimony to a congressional panel, the Dow has moved more than 200 points. In 15 of the last 16 sessions, the Dow has moved more than 100 points.
The S&P utilities sector index and the S&P financial index were the day's biggest decliners, with each index off 0.6 percent. Energy stocks fared better, with the S&P energy sector index off 0.4 percent.
"There just isn't much news to offset the potential negative of what will eventually happen, which is the Fed tapering off. You don't have fundamental evidence that the Fed will or will not be tapering off soon, and the market is caught in the middle period," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
The Dow Jones industrial average was down 67.90 points, or 0.45 percent, at 15,054.12. The Standard & Poor's 500 Index was down 8.17 points, or 0.50 percent, at 1,617.96. The Nasdaq Composite Index was down 24.44 points, or 0.71 percent, at 3,412.51.
Volatility has increased steadily in recent days. The CBOE Volatility Index, known as the VIX, shot up 6 percent to 18.09 at midday. If the VIX ended the day there, that would be the highest closing level since late February for Wall Street's favored index of anxiety.
American Express Co, down 1.6 percent at $75.28, was the Dow's biggest percentage decliner. The company's card business makes it particularly sensitive to interest rates.
In contrast, Hewlett-Packard was the Dow's biggest percentage gainer after its chief executive said revenue growth was "still possible" in fiscal 2014. The computer maker's stock shot up 2.7 percent to $24.89.
On Tuesday, the benchmark S&P 500 dropped 1 percent in volatile trading after Japan's central bank disappointed markets by holding its monetary policy steady.
The lack of further action by the Bank of Japan kindled uneasiness over when global central banks, particularly the Fed, will wind down their ultra-loose monetary policies.
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