STOCKS FALL sharply again.

Arkansas Democrat-Gazette - - FRONT PAGE - ALEX VEIGA

Hefty losses in health care and tech­nol­ogy com­pa­nies led U.S. stocks sharply lower Tues­day, hand­ing the mar­ket its big­gest pull­back since Au­gust and its worst two-day drop since May.

The broad slide, which briefly sent the Dow Jones in­dus­trial av­er­age down by more than 400 points, erased some of the big gains the mar­ket had racked up since the be­gin­ning of the year, though the mar­ket was still on track to close out Jan­uary with a gain.

Banks, in­dus­trial com­pa­nies and en­ergy stocks also ac­counted for a big slice of the mar­ket’s losses. Bond prices fell, send­ing yields to their high­est level since April 2014.

“This was a mar­ket that was over­bought and it was vul­ner­a­ble to some­thing pulling it back,” said Quincy Krosby, chief mar­ket strate­gist at Pru­den­tial Fi­nan­cial. “That said, we’re in the heav­i­est part of earn­ings sea­son this week and we ex­pect to see the ma­jor­ity of the re­ports com­ing out to be pos­i­tive. That could be the cat­a­lyst to have buy­ers come in.”

The Stan­dard & Poor’s 500 in­dex fell 31.10 points, or 1.1 per­cent, to 2,822.43. That’s the big­gest one-day drop since Au­gust 17. The Dow had its big­gest de­cline since May, los­ing 362.59 points, or 1.4 per­cent, to 26,076.89. The av­er­age had been down more than 411 points.

The Nas­daq slumped 64.02 points, or 0.9 per­cent, to 7,402.48. The Russell 2000 in­dex of smaller-com­pany stocks gave up 15.29 points, or 1 per­cent, to 1,582.82. The mar­ket’s last two-day los­ing streak was in late De­cem­ber.

Health care com­pa­nies were by far the big­gest losers on Tues­day. The sec­tor fin­ished with a loss of 2.1 per­cent. It’s still up 8.1 per­cent this year.

In­sur­ers, drug­mak­ers and dis­trib­u­tors slumped af­ter news that Ama­zon was team­ing up with JPMor­gan Chase and Berk­shire Hath­away to cre­ate a com­pany that helps their U.S. em­ploy­ees find qual­ity, in­ex­pen­sive care. The ven­ture, whose ini­tial fo­cus would be on de­vel­op­ing tech­nol­ogy, is in its early plan­ning stage.

Ex­press Scripts slid $2.61, or 3.2 per­cent, to $79.31. Cigna tum­bled $16.01, or 7.2 per­cent, to $207.89. Unit­edHealth Group lost $10.76, or 4.3 per­cent, to $236.65. An­them fell $13.58, or 5.3 per­cent, to $243.44.

The news gave Ama­zon shares a lift. The stock added $20.14, or 1.4 per­cent, to $1,437.82.

Tech­nol­ogy stocks fell al­most as much as health care shares. Corn­ing lost $1.92, or 5.6 per­cent, to $32.33.

Bond prices con­tin­ued to de­cline, driv­ing up the yield on the 10-year Trea­sury to 2.72 per­cent from 2.70 per­cent late Mon­day. That’s the high­est the rate has been since April 2014. The yield was as low as 2.04 per­cent last Septem­ber.

Bond yields have been ris­ing steadily over the past few months, mak­ing bonds more ap­peal­ing to in­vestors seek­ing in­come. Ris­ing yields can also lead to higher fi­nanc­ing costs for com­pa­nies, home­buy­ers and other bor­row­ers.

The mar­ket sell-off comes dur­ing a week with no short­age of po­ten­tial mar­ket-mov­ing cor­po­rate news and eco­nomic data.

Sev­eral big-name com­pa­nies are due to re­port quar­terly re­sults to­day and Thurs­day, in­clud­ing Ap­ple, Ama­zon, Mi­crosoft, Face­book and Google’s par­ent com­pany Al­pha­bet.

Also on in­vestors’ radar: Tues­day night’s State of the Union address and a two­day meet­ing of the Fed­eral Re­serve’s pol­i­cy­mak­ing com­mit­tee that wraps up to­day.

The Fed has sig­naled it ex­pects to raise its key short­term in­ter­est rate three times this year. But some in­vestors spec­u­lated that the growing strength in the U.S. econ­omy and la­bor mar­ket could prompt the cen­tral bank to per­haps fore­cast an ex­tra rate in­crease this year.

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