NEW YORK (

TheStreet

) -- U.S. stocks declined Tuesday on concern the

Federal Reserve

may cutback its stimulus measures after Kansas City Fed President Esther George warned that current policy may lead to higher inflation and financial instability.

The

S&P 500

fell 0.6% to close at 1,631.38.

Speaking in Santa Fe, New Mexico, George questioned whether the Fed's aggressive bond buying is ultimately good for the country's economic recovery.

"Will continuing with current policy and the creation of even greater excess reserves in the banking system result in more lending and economic growth or merely invite asset misallocation?," George said. "In light of improving economic conditions, I support slowing the pace of asset purchases as an appropriate next step for monetary policy."

Similarly, Fed Gov. Sarah Bloom Raskin's speech on job creation in Washington Tuesday afternoon did little to allay concerns the Fed may begin to curb its stimulus measures. Raskin didn't address the future of the bank's monetary policy but did question whether the quality of jobs being created in the economic recovery.

Dollar General

(DG) - Get Report

was the biggest decliner on the

S&P 500

, tumbling 9.2% to $48.64 after the discount retailer reported in-line first-quarter earnings of 71 cents a share but slashed its full-year earnings outlook to below Wall Street expectations, driven by slowing sales growth.

Monster Beverage

(MNST) - Get Report

was the biggest gainer in the index, jumping 10% to $59.60 after CEO Rodney Sacks reasserted at an annual investors meeting Monday that its energy drinks are safe to consume and that sales have improved in the last several months amid new product launches and distributor changes. Still, Sacks cautioned that it was still too early to tell whether sales would continue to improve in the long-run.

ExactTarget

(ET) - Get Report

soared 52% to $33.69 while

Salesforce.com

(CRM) - Get Report

shares tumbled 7.9% to $37.80. Salesforce.com, the largest maker of online customer-management software, is buying cloud marketing platform company ExactTarget for $2.5 billion

to further strengthen

Salesforce's position in cloud marketing services.

The

Dow Jones Industrial Average

dropped 0.5% to 15,177.54 while the

Nasdaq

fell 0.6% to 3,445.26.

The Census Bureau reported early Tuesday that the U.S. trade deficit widened by a less than expected $40.3 billion in April from an improved revision to the March deficit figure at $37.1 billion. However, this was mainly a result of the unwinding of the distortion caused by the Chinese Lunar New Year holiday. Economists, on average, were expecting a deficit of $41 billion in April.

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Written by Andrea Tse in New York

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Andrea Tse

.