By Jonathan Cheng

U.S. stocks slipped lower Wednesday as investors weighed positive developments in Europe against uncertainty over whether the Federal Reserve would announce further stimulus measures.

The Dow Jones Industrial Average slipped 25 points, or 0.2%, to 12814. The Standard & Poor's 500-stock index lost three points, or 0.2%, to 1356, and the Nasdaq Composite declined two points, or 0.1%, to 2928.

The S&P 500 and Nasdaq are both looking to extend their respective four-day winning streaks. For the Nasdaq, the four-day run is the longest since February.

Weighing on the indexes Wednesday were consumer staple stocks, dragged lower by Procter & Gamble's decline. Utilities and industrial stocks were also weak.

The gyrations came ahead of the Fed's monetary policy statement, due at 12:30 p.m. EDT (1630 GMT). Fed Chairman Ben Bernanke will follow with a press conference at 2 p.m., amid speculation that the central bank will announce the extension of its stimulus measure known as Operation Twist, in which the Fed sells short-term Treasurys and buys longer-dated ones in an effort to keep long-term borrowing costs down.

"Having gone through a big earthquake in 2008, we now have all the fiscal and monetary authorities around the world with their fire trucks and ambulances on the scene," said Stephen Auth, chief investment officer at Federated Investors. Mr. Auth said he expected the Fed to extend Operation Twist, calling it "the path of least resistance."

Others expressed skepticism about the usefulness of any move by the Fed for the economy and for markets.

"Monetary policy can only go so far. There are diminishing returns with each one of their policies," said Randy Bateman, chief investment officer for Huntington Asset Advisors in Columbus, Ohio. "Lower interest rates help a manufacturing-based economy, but they don't help as much in a service-based economy like ours."

European markets were broadly higher, with the Stoxx Europe 600 finishing up 0.6%, after Greece's conservative New Democracy party secured a consensus for a coalition government with the Socialist Pasok party and the Democratic Left party. New Democracy leader Antonis Samaras was also sworn in as prime minister, removing a recent source of market uncertainty.

In London, the minutes from the Bank of England's last policy meeting revealed the central bank was close to pumping more stimulus in the U.K. economy. Also giving a lift to sentiment Wednesday, data showed that job growth in the U.K. in April reached its highest level in more than three years. The FTSE 100 index rose 0.6%.

Tensions also eased a touch in Spain, where the yield on 10-year government bonds slipped further below the key 7% mark and the IBEX-35 index tacking on 1.5%.

Asian markets were mostly higher on hopes of more stimulus from the Fed. Japan's Nikkei Stock Average rallied 1.1%, though China's Shanghai Composite bucked the trend to slip 0.3%.

Crude-oil futures fell more than 2.5% to just above $82 a barrel, after government inventory numbers showed a larger-than-expected build-up in crude reserves. Gold futures shed 1.1% to around $1,605 an ounce. The U.S. dollar lost ground against the euro but rose against the yen. Demand for U.S. Treasurys fell, pushing the yield on the benchmark 10-year note higher to 1.6633%.

In corporate headlines, Procter & Gamble tumbled 3.4% to lead the falling Dow components after the blue-chip consumer products company lowered its earnings outlook for the current quarter and for the next fiscal year, citing slower-than-expected growth in developed markets. Rivals Colgate-Palmolive and Kimberly-Clark also fell 1% and 1.9%, respectively.

Walgreen fell 4.3% one day after tumbling 5.9%, to make it the day's biggest decliner among S&P 500 components. Wednesday's decline came after analyst downgrades, following Walgreen's $6.7 billion deal to buy nearly half of European pharmacy giant Alliance Boots, a bet by the largest U.S. drugstore chain that it can expand in Europe as it grapples with declining sales back home.

Adobe Systems slid 3.4% after the company provided a downbeat outlook for the current quarter, citing a weaker demand forecast in Europe.

Cisco Systems rose 1.5% after analysts at BMO Capital Markets pushed its target price for the networking giant higher, arguing the current share price doesn't give the company credit for a strong valuation based on solid business execution.

Facebook eased 2% one day after closing at its highest level since May 25.

Burger King Worldwide pared earlier gains to rise 0.9% on its first day of public trading on the New York Stock Exchange.

Idenix Pharmaceuticals climbed 16% after the company announced upbeat interim results from a Phase 2 study of its hepatitis C treatment.

Write to Jonathan Cheng at jonathan.cheng@wsj.com