U.S. stocks declined on Tuesday, with the S&P 500 and Nasdaq falling for a third day to close at five-week lows, as investors weighed data illustrating a slowing global economy and tracked conflict in the Middle East.
"There has been a lot of negative thinking about China, Europe, and Ukraine, and lots of worries about the Middle East that could clearly get worse," said Hugh Johnson, chairman of Hugh Johnson Advisors.
"By my numbers we were 4 percent overvalued when we started this mess (pullback) and I would welcome a 6-to-8 percent decline," Johnson added.
The Russell 2000 Index of smaller companies also dropped for a third session, leaving it down 3.9 percent for the year.
"A lot of it is spillover from Europe, the data last night wasn't so great. We had the contraction in France, slower growth in Germany, and China came out with employment numbers that were not so great. People are nervous and taking profits after all-time highs," said JJ Kinahan, chief strategist at TD Ameritrade.
Shares of AbbVie declined after the Treasury Department moved to restrict tax-saving mergers, with the steps coming two months after the drug manufacturer said it would acquire Dublin-based Shire in a deal that involved AbbVie planning to transfer its headquarters overseas to reduce its taxes.
Apple rose as the company denied a TechCrunch report that it planned to close Beats Music, the streaming service the company recently purchased.
"Everyone is worried; everyone is trying to call a market top," said Nick Raich, CEO of the Earnings Scout, who chalked up another day of selling on Wall Street to "profit taking ahead of earnings season" after gains last week.
The market's retreat "is a really welcome event; it starts to get stocks back to levels that make more sense," said Johnson.
The United States and Arab allies bombed Syria, killing dozens of Islamic State militants and members of a separate al Qaeda-tied group. And the Israeli army said it downed a Syrian fighter jet that violated its airspace.