“The market's slow to react — the headlines today could have been the headlines yesterday and last week,” Fitzpatrick said. Investors should look to step in and buy this market dip, he recommended.
The market was buzzing with a fresh round of speculation that Spain might be next to need a bailout.
Prime Minister Jose Luis Rodriguez Zapatero shot back that such speculation was "complete madness." Zapatero said any speculation about the euro zone outside of Greece was "totally unfounded and irresponsible."
Stocks seesawed in the last week as Europe's efforts to agree on a bailout package for Greece proceeded in fits and starts. An agreement of $144 billion from the EU and IMF came together on Sunday, but its size worried investors that Europe would have a tougher time assembling an aid package if any other country were to get in trouble.
Adding to the worries, investor Marc Faber told Bloomberg that China's economy could "crash" in the next year as the nation's property bubble is about to burst. “The market is telling you that something is not quite right,” Faber told the news service.
This echoed comments investor Jim Chanos made in an interview with Charlie Rose last month, where he said China is "on a treadmill to hell" and "can’t afford to get off this heroin of property development."
Oil fellbelow $83 a barrel while gold settlebelow 41,170 an ounce.
Investors shrugged off a pair of encouraging U.S. economic reports. Pending-home sales rose 5.3 percent in March, slightly better than expected, while factory orders jumped 1.3 percentin March, significantly better than the 0.1-percent drop expected.
On Monday, stocks logged their biggest gain since mid-February, with the Dow up more than 140 points.
The biggest decliners today were materials, industrials and technology, with Caterpillar , Alcoa and Hewlett-Packard leading Dow decliners.
Transport and technology stocks, some of the biggest gainers on Monday, were the biggest decliners today: The Nasdaq was down over 3 percent, while the Dow transportsskidded more than 4 percent.
Apple shares dropped 2.9 percent after federal regulators said they plan to examine whether the tech giant is violating antitrust rulesby requiring software developers to use Apple programming tools to create applications for the iPhone and iPad.
Shares of other tech titans such as Oracle and Dell fell more than 4 percent.
"It looks like we've got some profit-taking on early-cycle exporters, companies with a big global presence over in Europe," Fred Dickson, chief market strategist, D.A. Davidson & Co. told Reuters. "We're taking profits out of technology, energy and industrials."
Financial stocks skidded as the Senate prepares to cast its first votes on the financial-reform bill with a number of amendments coming to the floor for discussion.
Bank of America and JPMorgan shed more than 2 percent, while Citigroup fell more than 3 percent.
Nearly all of the 30 Dow components were lower, except Merck, Pfizer and Walmart .
Merck beat profit estimates with its report this morning, though it offered a cautious outlook.
And Pfizer, the world's largest drug maker reported a huge jump in first-quarter revenue, helped by its acquisition of Wyeth last year, but charges dragged on net income.