* Shares tumble after Fed chief signals stimulus could be pared back
* Fed maintains pace of bond purchases for the present
* REITs slump after Bernanke comments
* Adobe, FedEx rise after results; Sprint tumbles
* Indexes off: Dow 1.3 pct, S&P 500 1.4 pct, Nasdaq 1.1 pct
By Ryan Vlastelica
NEW YORK, June 19 (Reuters) - U.S. stocks fell more than 1 percent on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank would start to reduce its stimulus measures later this year if the economy is strong enough.
Equities have been closely tethered to ultra-loose monetary policy, which has been key to the S&P's climb of more than 14 percent so far this year. Benchmark 10-year U.S. bond yields jumped to a 15-month high on expectations the Fed will reduce its bond buying.
Bernanke said at a news conference the Fed may reduce its bond-buying program with the goal of ending in mid-2014. While investors have expected the Fed to pull back on its stimulus, Bernanke's comments gave the most explicit timeline to markets, causing stocks to tumble on heavy volume. In the days leading up to the Fed announcement, stocks had swung between modest losses and breakeven.
"I was surprised he addressed the issue of tapering, since last time he did we saw a fairly significant market hiccup," said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio.
The Dow Jones industrial average was down 205.96 points, or 1.34 percent, at 15,112.27. The Standard & Poor's 500 Index was down 22.89 points, or 1.39 percent, at 1,628.92. The Nasdaq Composite Index was down 38.98 points, or 1.12 percent, at 3,443.20.
Shortly before Bernanke spoke at a news conference, Fed policymakers said in a statement the Fed would keep buying $85 billion in bonds per month and gave no explicit indication that it was close to scaling back the stimulus program.
About 6.65 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, above the daily average so far this year of about 6.36 billion shares.
"If the economic growth we have is sustainable without the Fed, that's good news," added Bateman, who helps oversee $15 billion. "But it is hard to wean the system off the easy money."
The benchmark 10-year U.S. Treasury note fell 1 9/32, with the yield at 2.3325 percent.
The S&P 500 has rose for the two days before the Fed decision on confidence that current stimulus would be left in place even if Bernanke nods at the need to begin reducing bond purchases later in the year.
The stimulus helped the stock market reach a record high on May 21, one day before Bernanke said the Fed could reduce its bond-buying in the "next few meetings" if the economy gained momentum. His comments rocked markets, boosting bond yields and halting stocks' rally.
Despite the increased volatility of the past month, the market has moved largely sideways. The S&P 500 is about 2.4 percent below its record high of 1,669.16, reached May 21.
More than four-fifths of stocks traded on the New York Stock Exchange fell while 70 percent of Nasdaq-listed shares ended lower.
Real estate investment trusts, whose chunky dividends attracted investors during the low interest-rate period, were among the hardest hit on Wednesday. The benchmark MSCI US REIT index was down 3.1 percent, with Pennsylvania Real Estate Investment Trust off 2 percent to $19.19 and Simon Property Group down 2.9 percent to $162.52.
REITs are exempt from corporate-level income tax if the companyies distribute at least 90 percent of their taxable income in the form of dividends to shareholders. Since Bernanke began signaling the possible end of the policy, the index is down 12 percent.
Shares of Adobe Systems Inc rose 5.6 percent to $45.78 a day after the maker of Photoshop and Acrobat software reported a higher-than-expected adjusted quarterly profit.
FedEx Corp reported higher quarterly profit than expected as its ground shipment business improved. Shares were up 1.1 percent at $100.54.
After the market closed, Jabil Circuit Inc fell 1.6 percent in extended trading after it reported results while Micron Technology Inc lost 1.3 percent. Red Hat Inc rose 2.4 percent after its results.
On the downside, Sprint Nextel was both the most heavily traded stock on the New York Stock Exchange and one of the biggest decliners on the S&P 500, down 4.4 percent to $7.
Japan's SoftBank cleared a major hurdle in its attempt to buy Sprint as rival bidder Dish Network declined to make a new offer after SoftBank sweetened its own bid last week.