U.S. stocks fell for the first time in three days as a weakened dollar and higher oil prices kindled fresh concern about inflation.

The second largest shipper in the U.S. fell the most it has in two months after the company said the housing slump slowed shipments of housing materials, affecting its bottom line. Its shares dropped 2.9 percent to $104.45, while the Dow Jones trasnport average fell 1.9 percent.

The S&P 500 lost 10.28, or 0.7 percent, to 1,518.75. The Dow Jones Industrial Average decreased 48.86, or 0.4 percent, to 13,766.7. The Nasdaq Composite Index slipped 12.19, or 0.5 percent, to 2,654.29.

The retreat halted the biggest 2 day rally in nearly 4 years after the Fed cut its benchmark interest rate by half a percentage point on Tuesday. Speculation the Fed will continue to reduce borrowing costs sent the U.S. currency to a record low against the euro, helping to push up oil and gold prices.

Spot gold surged to $736.40 an ounce and front-month crude oil futures hit a record $82.55 a barrel. Both commodities are priced in dollars, making them attractive for holders of foreign currencies as the dollar declines.

The U.S. currency fell 0.8 percent to $1.4067 per euro at 4 p.m. in New York and earlier reached a record low of $1.4098, according to Bloomberg data. The U.S. currency has lost 6.2 percent this year versus the euro.

Also during the regular session, Bear Stearns shares slipped 0.2 percent to close at $115.46 on the NYSE, reversing an earlier gain of 3.3 percent to a session high at $119.50. The investment bank posted a sharply lower profit.

Circuit City Stores Inc. fell $1.90, or 18 percent, to $8.67 after reporting its fourth straight quarterly loss on price cuts for flat-panel televisions. The loss was 38 cents a share for the quarter ended Aug. 31.

The retailer had the steepest decline in the S&P 500 and led the S&P 500 Consumer Discretionary Index to a 1.5 percent drop.

After the closing bell, shares of Oracle and Nike Inc. rose after reporting results that beat projections. Oracle advanced 1.2 percent to $21.30 in electronic trade, while Nike gained 3.6 percent to $60.44.