U.S. stocks retreated after the markets single-plunge in nearly a year on Wednesday after Philadelphia Federal Reserve President Charles Plosser said he was against overly aggressive rate cuts.

The Dow Jones Industrial Average fell 65.03 points, or 0.53 percent to 12,200.10, the Standard & Poor's 500 index lost 10.18 points, or 0.76 percent to 1,326.46 and the Nasdaq Composite Index fell 30.82 points or 1.33 percent to 2,278.75.

During the days trading, the Dow was more than 120 points in the green, bouncing back after yesterday's sell-off.

Plosser said that while he's ready for more interest rate cuts if the economy worsens, he also expressed more worries about inflation, according to Dow Jones Newswires. Those comments added further turmoil to a market that has been calling for more interest rate cuts next week to encourage economic growth. He also said while chances of a recession have risen, the U.S. is likely to skirt a recession, the wire service said.

Wall Street reacted positively to solid earnings from Dow component Disney after yesterday's closing bell. The media conglomerate showed little signs of being damaged by an economic slowdown. Instead, the weak dollar may have helped bring more tourists to its theme parks. The stock hit a new five-week high on the news.

The company closed up $1.32 or 4.37 percent at $31.39 a share.

Meanwhile, another media giant, Time Warner met Wall Street expectations with a fourth-quarter profit released today, excluding one-time charges of 29 cents a share. During today's earnings conference call, Bewkes told investors he plans to split AOL's Internet-access unit and is discussing lowering the company's stake in Time Warner Cable. Shares of Time Warner have jumped about 3 percent today.

Time Warner ended $0.31 or 1.82 percent higher at $15.68 while Time Warner Cable was down nearly 4 percent on the news and closed at $23.55.

Nearly all of those big gains on the blue-chip index were erased through just the first two trading days of this week, with the Dow losing more than 475 points coming into today's action. Tuesday's 2.9 percent loss on the Dow was its worst since February 27, 2007.