Stocks down again as investors sweat the Fed

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A strengthening job market wasn't good enough to pull stocks out of their recent malaise. In fact, it seems to be making investors more nervous about what the Federal Reserve will do next.

The Dow Jones Industrial Average, S&P 500, and the Nasdaq were all lower in early trading Wednesday.

The pessimism comes despite a report showing the economy added 215,000 private-sector jobs in November, according to payroll processor ADP . That's well above the 160,000 gain that was expected.

The strong jobs numbers raised concerns about the Fed pulling back, or tapering, it's $85 billion per month bond buying program.

Peter Cardillo, chief market strategist at Rockwell Global Capital, said ongoing concerns about when the Fed will start cutting back on its bond purchases are giving investors an 'excuse' to do some selling before the year is up.

Bond investors appear to be worried too. The yield on the 10-year Treasury note spiked to 2.85% Wednesday morning, near the year's high of almost 3% back in September. At that time, investors feared the Fed would taper at its meeting in September. It didn't. But there are growing fears that the Fed could now announce it is pulling back on stimulus at the conclusion of its next meeting on December 18.

Looking ahead, the Census Bureau will publish data on new home sales at 10 a.m. ET. The Fed will release its Beige Book, a summary of regional economic conditions, at 2 p.m. ET.

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In corporate news, J.C. Penney said Tuesday that same-store sales in November grew 10% from the same period last year. The stock, which has been the worst performer on the S&P 500 this year, is in the midst of a turnaround and has caught the attention of some major hedge funds.

But investors seemed unimpressed with the decent November sales. Shares of J.C. Penney were down 3% in early trading.

European markets slid in afternoon trading, shrugging off the final purchasing managers' data for November that came in a little better than expected.

The European Union levied a record antitrust fine of €1.7 billion ($2.3 billion) on six European and U.S. banks and brokers for rigging benchmark interest rates. The largest fine, of €725 million ($986 million) went to Deutsche Bank .

Stocks in Asia were mixed at the close.