Losses by tech, banks weigh down indexes

Stocks closed lower on Wall Street Tuesday, led by drops in technology companies and banks.

The S&P 500 gave back 0.7%, pulling the index further below the record high it set on Friday.

Small-company stocks, which have been beating the rest of the market in recent months, fell more than other sectors.

Bond yields fell and weighed down banks, which rely on higher yields to charge more lucrative interest on loans.

The yield on the 10-year Treasury fell to 1.56% from 1.60%.

Investors are focusing on company earnings reports that are steadily coming out this week. On average, analysts expect profits across the S&P 500 to be up 24% from a year earlier, according to FactSet.

Technology stocks accounted for the biggest share of the decline in stocks on Tuesday, putting more pressure on the broader market.

The broader market took a more defensive posture as utilities, real estate stocks and a mix of companies that make consumer staples like food and household products gained ground.

The Russell 2000 index of smaller company stocks, which has been outpacing the broader market, was taking the brunt of the losses, shedding 2.4%.

The market has been swaying between gains and record highs to pullbacks as investors weigh solid economic growth against the risks still posed by the virus pandemic.

“Overall, we’re going to have some volatility in the market this year, but everything to me looks fairly rosy for the next six months or so,” said Sylvia Jablonski, chief investment officer at Defiance ETFs.

Investors are in the middle of first-quarter earnings season. Roughly 80 members of the S&P 500 will report their results this week, as well as one out of every three members of the Dow. Wall Street will be looking to see if Corporate America is recovering with the rest of the economy from the coronavirus pandemic.