Late slump leaves market lower after a choppy day

Stocks ended broadly lower on Wall Street Tuesday as trading turned wobbly a day after the market notched its biggest jump in more than five weeks.

The S&P 500 fell 1% after having been up by 0.4% in the early going. Losses in banks, health care stocks and household goods companies accounted for a big portion of the selling. A late-day slide erased early strength in technology stocks and companies that rely on consumer spending.

Bond yields mostly fell and the price of gold rose, signs that investors were feeling cautious.

“Today is a little bit of a pause day after a significant rally,” said Eric Freedman, chief investment officer at U.S. Bank Wealth Management.

Investors are betting that the economy and corporate profits will begin to recover from the coronavirus pandemic as the U.S. and countries around the world slowly open up again. However, concerns remain that the relaxing of stay-athome mandates and the reopening of businesses could lead to another surge in infections, potentially ushering in another wave of shutdowns.

The S&P 500 lost 30.97 points to 2,922.94, snapping a three-day winning streak. The Dow Jones Industrial Average fell 390.51 points, or 1.6%, to 24,206.86. The Nasdaq composite dropped 49.72 points, or 0.5%, to 9,185.10. The Russell 2000 index of small-company stocks gave up 25.97 points, or 1.9%, to 1,307.72.

Wall Street kicked off the week with a bang, as optimism about a potential vaccine for COVID-19 and hopes for a U.S. economic recovery in the second half of the year pushed stocks sharply higher Monday, reversing all of the market’s losses so far this month. Tuesday’s selling cut into some of those gains. The S&P 500 is now down 13.7% from its all-time high in February.

Investors are focused on gauging the risk for a second or third wave of coronavirus cases as more swaths of the U.S. reopen for business.

“As long as we have a supportive Fed, a responsive legislative branch that is at least open to considering more stimulus, and we see openings occur on a measured, but consistent basis, we still think there’s still basis for this market to be propelled higher,” Freedman said.