The major indexes closed Tuesday with the largest losses so far this year, adding to the notion that the market's rally has gotten overstretched.
X The Dow Jones industrial average slid 1.4%, the S&P 500 1.1% and the Nasdaq composite 0.9%. The Russell 2000 lost almost 1%. For the Nasdaq, it was the worst one-day drop since Dec. 4, when the composite fell 1.1%.
Volume rose from Monday's levels. Losers led winners by about 15-to-4 on the NYSE and by 9-to-5 on the Nasdaq.
Rising bond yields added to concerns that stock prices have been rising faster than normal. The yield on the 10-year Treasury note added 3 basis points to 2.72%, the highest since April 2014.
Managed care, drugstores and other health care industry groups were rattled, ending among the worst groups of today's market. The sell-off came after Amazon.com (AMZN), JPMorgan Chase (JPM) and Berkshire Hathaway (BRKB) set up a venture to cut medical costs for their employees.
The energy sector was broadly lower also. Exploration, drilling and other oil-related groups fell as much as 3%. The price of crude is easing after a rally that began in mid-December. On Tuesday, traders worried that production was picking up.
Metals and other cyclicals also were weak. Steel producers Nucor (NUE) and AK Steel (AKS) sold off despite better-than-expected earnings.
Leading stocks were mostly lower. The Innovator IBD 50 ETF (FFTY), which tracks the IBD 50 index, gapped down to a loss of nearly 2% but found support at the 50-day moving average.
Scotts Miracle-Gro (SMG) plunged below its 50-day and 200-day moving averages in the heaviest volume of its run from August 2016. That marked sell signals for the stock, which was the main reason the agricultural chemicals industry group was Tuesday's worst.
The garden-care products company posted quarterly results that missed expectations. Management said the slower-than-expected pace of regulatory changes on cannabis in California hurt its hydroponics business. Hydroponics is the science of growing plants, including marijuana, without using soil.
Integrated Device Technology (IDTI) gapped below its 50-day moving average in heavy trading. Shares fell 11% to 29.98, and dropped more than 8% below the 32.97 buy point of a breakout Jan. 19, triggering the loss-cutting sell signal. The chip company reported earnings of 42 cents a share, slightly above views and 20% higher than a year ago. Sales growth accelerated 23% to $217.1 million.
After the close, invisible braces company Align Technology (ALGN) shares rose 7% after the company reported earnings and sales for the fourth quarter.
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