WASHINGTON (dpa-AFX) - After moving significantly higher over the past several sessions, stocks gave back some ground during trading on Tuesday, although strength among technology stocks lifted the tech-heavy Nasdaq to a new record high.
The Nasdaq pulled back off its best levels after topping 10,000 for the first time but still closed up 29.01 points or 0.3 percent at 9,953.75. Meanwhile, the Dow slumped 300.14 points or 1.1 percent to 27,272.30 and the S&P 500 slid 25.21 points or 0.8 percent at 3,207.18.
The weakness on Wall Street partly reflected profit taking, as traders cashed in on the strong gains posted in recent sessions.
Selling pressure was somewhat subdued, however, with stocks holding on to the bulk of their recent gains as traders generally remain optimistic about a quick economic recovery.
Traders also seemed reluctant to make more significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday.
The Fed is not expected to announce any significant policy changes, although traders are still likely to pay close attention to the central bank's assessment of the economic outlook.
Energy stocks turned in some of the market's worst performances after helping to lead the way higher in recent sessions. The pullback came even though the price of crude oil for July delivery climbed $0.75 to $38.94 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 7.4 percent, the NYSE Arca Natural Gas Index plummeted by 5.5 percent and the NYSE Arca Oil Index tumbled by 4.1 percent.
Significant weakness was also visible among banking stocks, as reflected by the 2.3 percent slump by the KBW Bank Index. The index gave back ground after ending the previous session at a three-month closing high.
Tobacco, transportation and steel stocks also saw considerable weakness on the day, while gold and retail stocks moved to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.
Meanwhile, the major European markets all moved sharply lower on the day. While the U.K.'s FTSE 100 Index plunged by 2.1 percent, the German DAX Index and the French CAC 40 Index both tumbled by 1.6 percent.
In the bond market, treasuries saw further upside following the modest rebound seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.5 basis points to 0.829 percent.
Looking Ahead
The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing a report on consumer price inflation.
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