US stocks stumbled on Wednesday as cautious investors locked profits following hefty gains in the last four sessions and as new data underscored a weak job market in the recession-battered economy.

The Dow Jones Industrial Average shed 65.63 points (0.75 percent) to end at 8675.24 after an 11th hour rebound helped the blue chip index pare its triple-digit loss.

The tech-rich Nasdaq fell 10.88 points (0.59 percent) to 1825.92 and the broad Standard & Poor's 500 index was down 12.98 points (1.37 percent) to 931.76.

As the market opened on Wednesday, investors moved to book profits from recent gains after data showed continuing big layoffs and a fall in mortgage applications in the battered housing sector.

A fall in oil prices from seven-month peaks after a rebound in the US dollar and buildup in US petroleum inventories also dampened stocks that had been rising in tandem with the key commodity in recent days.

"Participants are stopping to catch their breath after a nearly 6.0 percent gain in just the last four trading sessions," said Briefing.com's Patrick O'Hare.

A survey by payrolls firm ADP showed on Wednesday that the US private sector shed 532 000 jobs in May.

The decline in the May non-farm private employment figure was less steep than the revised 545 000 in April, but slightly higher than the 525 000 job losses expected by most analysts.

"Though the number of slashed salaries was the fewest since November, the figures were worse than analysts expected -- and, for some on the Street, a sinister sign ahead of the government's nonfarm payrolls report on Friday," said Andrea Kramer of Schaeffer's Investment Research.

Most analysts expect Friday's report to show employers had cut 520 000 jobs last month after reducing payrolls by 539 000 in April, which was the smallest number of jobs cut since October.

They also believe the unemployment rate would rise to 9.2 percent in May, the highest since September 1983, from 8.9 percent in April.

Also Wednesday, the US Mortgage Bankers Association said mortgage applications fell 16.1 percent for the week ended May 29, following a drop of 14.2 percent for the prior week.

The bigger drop reflected a sagging demand for home refinancing loans as interest rates surged, analysts said.

Petroleum stocks fell in line with declining prices for the commodity. ExxonMobil shed 1.15 percent to 72.08 dollars and Chevron 1.57 percent to 68.26 dollars.

Also down were aluminum producer Alcoa, by 4.28 percent to 10.07 dollars, aviation giant Boeing by 1.69 percent to 48.37 dollars and chemical behemoth DuPont by 3.86 percent to 28.87 dollars.

Internet giant Yahoo! fell 1.93 percent to 16.30 dollars after Chief Executive Carol Bartz played down speculation of an Internet search tie-up with Microsoft, which ended up 1.59 percent to 21.74 dollars.

Bonds rose. The yield on the 10-year Treasury bond fell to 3.551 percent from 3.644 percent on Tuesday and that on the 30-year bond dropped to 4.445 percent from 4.489 percent. Bond yields and prices move in opposite directions.