© Reuters. Investing.com - After three days of big gains, stocks pulled back on Tuesday.
The S&P 500 fell 0.8%. The Dow dropped 0.7%, and the Nasdaq Composite slid 0.7%.
The easy explanation - also a likely one - is that investors decided to cash in recent gains to see what will happen next. The risks to the market haven't gone away, and investors showed their concerns with a wave of selling in the last 15 minutes of trading.
As a result, the major averages remain 4% or more below their peaks reached in July. The S&P 500 is off 4.2% from its July high. The Dow is down 5.2%
The Nasdaq is off 4.7%, with the Nasdaq 100 index down 4.52%. The Nasdaq 100 was off 0.71% on the day.
An additional factor: Many investors and money managers go on vacation in the last two weeks of August, which reduces trading volumes and can boost volatility.
“For some time, we have been concerned that investors were too reliant on Fed rate cuts and too complacent about the prospects for a China trade deal, and we are now seeing the market waking up to these risks," wrote David Spika, president of GuideStone Capital Management, in a Tuesday note. "There is way too much uncertainty to be near-term bullish today,"
Tech shares were held back (with Apple (NASDAQ:AAPL) an exception) by a Wall Street Journal report that as many as 20 states attorneys general will launch a joint antitrust investigation of large technology companies.
Apple's gain was tiny: just 1 cent to $210.36. It was one of 24 Nasdaq 100 stocks that were higher Tuesday and one of just three Dow stocks to see gains on the day.
The Dow was led by Home Depot (NYSE:HD), whose earnings beat analyst estimates. Shares were up 4.4% as a result. But the company injected some notes of worry. Lumber prices were lower, the company warned, and it's worried about the impact of higher tariffs on many home-improvement products.
The third Dow winner was United Technologies (NYSE:), up just three cents.
Oil prices were basically flat, with West Texas Intermediate crude down a penny at $56.13. Brent crude added 29 cents to $60.03 a barrel.
U.S. energy stocks, particularly oil-and-gas production and oil services companies, struggled.
Retail stocks were hit, particularly Macy’s (NYSE:M) and Nordstrom (NYSE:JWN). Nordstrom reports fiscal-second-quarter earnings after Wednesday's close. Macy's quarterly results last week were badly received, with shares falling 10% in a day. Nordstrom shares are down 45% this year and 20% since June 28.
Adding to the unease in U.S. markets was a growing political crisis in Italy after its prime minister resigned.
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