U.S. stocks dropped, sending the Standard & Poor’s 500 Index to a third day of losses, after minutes from the Federal Reserve signaled the central bank may reduce bond purchases in the coming months.

The S&P 500 fell 0.4 percent to 1,781.37 at 4 p.m. in New York. The Dow Jones Industrial Average slipped 0.4 percent to 15,900.82 and has topped 16,000 for three straight days before returning below the threshold.

“We’ve also had a very, very good year, so this may be a decision-making point for those who have enjoyed a very good return in the equity market,” Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank in Charlotte, North Carolina, said in a phone interview. His firm manages $170 billion. “The minutes were a continuation of what the FOMC has been saying all along.”

The S&P 500 has rallied 25 percent in 2013, poised for its best year in a decade, following stimulus from the Fed and better-than-estimated earnings. The gauge traded for about 17 times its companies’ reported earnings at its last record on Nov. 15, the highest valuation since May 2010.

Policymakers expected that the economic data will show ongoing improvement in the labor market and “thus warrant trimming the pace of purchases in coming months,” according to the record of the Federal Open Market Committee’s Oct. 29-30 gathering. Stocks pared gains earlier as Fed Bank of St. Louis President James Bullard said a reduction in bond buying is “on the table” for the next policy meeting in December.

As of yesterday, four of five investors expected the Fed to delay a decision to begin reducing its bond buying until March 2014 or later, with just 5 percent looking for a move next month, according to the latest Bloomberg Global Poll. Only one in 20 said the central bank will begin to reduce its purchases at its Dec. 17-18 meeting, according to the poll yesterday of investors, traders and analysts who are Bloomberg subscribers.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, was little changed at 13.38. The measure is down 26 percent this year.