The Dow Jones Industrial Average dropped 52.98 points (0.45 percent) to 11,802.44 around 1420 GMT.

The tech-rich Nasdaq Composite lost 4.88 points (0.18 percent) at 2,662.45, while the broad-market S&P 500-stock index retreated 3.72 points (0.29 percent) to 1,278.15.

"Despite a solid rebound in Japanese equity markets following the two-day tumble to more than a two-year low, US equity markets are under some pressure as euro-area debt concerns and festering uneasiness in the Middle East and North Africa are back in focus," Charles Schwab analysts said in a client note.

Patrick O'Hare at Briefing.com predicted continued volatility in the equity market, citing a dynamic flow of media reports highlighting "a messy world situation."

Japan was still racing to control a radiation leak at its Fukushima nuclear complex; Bahrain and Libya were still fighting political protesters; and Europe's sovereign debt issues remained in focus with a Moody's downgrade Tuesday of Portugal's debt, he noted.

Sentiment was further dampened by poor US economic data showing larger-than-expected wholesale price pressures and a slump in housing construction to a near-record low.

The Labor Department said its producer price index rose 1.6 percent in February from January. The sharpest rise since June 2009 was led by surges in food and energy prices.

Construction of new homes in the United States plunged 22.5 percent in February to almost the record low of April 2009, when the economy was mired in the worst recession since the 1930s, according to Commerce Department data.

Among stocks in focus, General Electric, nuclear technology provider to the US and Japan, fell for the third straight day, by 0.97 percent to $19.42.

Nuclear plant operators were mixed: Excelon lost 1.50 percent while Constellation gained 0.49 percent.

Insurer Aflac, which has extensive business in Japan, rose 1.49 percent to $51.65 after Deutsche Bank analysts recommended the stock. Aflac had lost nine percent in three trading days.

Technology licensing firm Rambus soared 5.59 percent to $19.82 after announcing it was renewing its partnership with Japanese firm Toshiba.

On Tuesday US stocks pared steep losses after a mostly upbeat assessment from Federal Reserve policymakers saying the recovery was on "a firmer footing." The Dow dropped 1.15 percent, the Nasdaq shed 1.25 percent and the S&P 500 index lost 1.12 percent.

Worried investors flocked Wednesday to the relative safety of bonds, pushing up prices.

The yield on the 10-year Treasury bond fell to 3.27 percent from 3.32 percent late Tuesday, while that on the 30-year bond slid to 4.43 percent from 4.47 percent the prior day.

Bond prices and yields move in opposite directions.