U.S. stocks closed lower Tuesday, as investors weighed slight declines in oil prices and more indications of slowdown in China's economy, amid key third-quarter earnings reports. (Tweet This)
"I don't think there's anything to it other than, seven-straight days up deserves at least one day of (pullback)," said James Meyer, chief investment officer at Tower Bridge Advisors. "I don't think we go back and retest the lows ... I think investors buy the dips."
The Dow Jones industrial average closed lower, breaking a seven-day winning streak. The last time the Dow posted seven-straight days of gains was December last year.
"It's a lot of the same thing. It's general nervousness. There's a lot of volatility around the sector," said Paul Yook, portfolio manager at BioShares Funds.
He also noted some uncertainty over where the bottom in the biotech stocks is. IBB is more than 25 percent below its 52-week high.
"Transports (are) certainly a negative reflection on economic activity. It's hard for the market to advance with transports trailing today," said Jack Ablin, chief investment officer at BMO Private Bank.
Health care and industrials were the greatest decliners in the S&P 500.
Oil failed to hold higher, with crude futures settling down 44 cents, or 0.93 percent, at $46.66 a barrel. Brent also declined to below $49 a barrel.
The International Energy Agency reported that global oil demand growth would slow in 2016, to 1.2 million barrels per day from 1.8 million in 2015.
Earlier, the major averages briefly tried to recover from an initial sell-off on weaker-than-expected China trade data.
"The market seems to have found some equilibrium," said Art Hogan, chief market strategist at Wunderlich Securities.
"Away from the economic data, and the Fedspeak, which was dovish, you got commodity prices (higher this morning)," he said.
Stocks closed mildly higher Monday, holding solid gains from last week's rally.
Before the opening bell, Dow futures traded more than 100 points lower, following declines in European stocks and most Asian equities. The Shanghai Composite managed to post a mild gain nearly 0.2 percent despite the weak report.
"I think (the China data) is helping exacerbate the issue," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
"We had a couple of earnings after the close yesterday that the market couldn't react to, maybe setting the tone for earnings season that so far hasn't been met with strong results," he said.
China's dollar-denominated imports plunged by a worse-than-expected 20.4 percent in September from a year earlier, while exports slipped 3.7 percent, producing a trade surplus of $60.34 billion, official data showed on Tuesday.
"I think this is not anything new for anyone," said Tom Siomades, head of Hartford Funds Investment Consulting Group. "This has been going on for months now. I think the impact is lessening to some point now. You're not getting these crazy, volatile days."
-listed corporations are expected to post a 5.3 percent decline in third quarter 2015 earnings growth, the first third-quarter decline in six years, according to consensus data from S&P Capital IQ. However, excluding the energy sector drag of a sharp negative 65.6 percent, S&P 500 earnings growth would be 2.7 percent.
Nick Raich, CEO of The Earnings Scout, noted that the first 26 S&P 500 quarterly reports showed an average growth of 10.9 percent from last year, while revenue has declined about 0.82 percent.
"Earnings aren't the problem. It's the sales," he said, noting some additional pressure on stocks Tuesday from the weaker-than-expected Chinese trade data. "China data are really telling the story too that demand for foreign goods in China (is) down."
The U.S. dollar held mildly lower against major world currencies, with the euro above $1.138 and the yen at 119.74 yen against the greenback.
"We're trapped in a range," John Caruso, senior market strategist at RJO Futures, said of the steady levels in currencies. "We're waiting for the next central bank (meeting)."
"Central bank policy trumps everything," he said, "but we might be faced with the realization that earnings expectations are not as strong as they have been."
The European Central Bank meets next week, and the Federal Reserve holds its meeting in two weeks.
Federal Reserve Governor Daniel Tarullo said in a CNBC interview Tuesday afternoon that it is not appropriate to raise rates based on the current environment.
Earlier, St. Louis Fed President James Bullard said in a Reuters report that conditions support a rate hike. However, he said that as a practical matter, the economic data out since the September meeting is unlikely to convince other policymakers to increase rates when the Fed meets at the end of the month.
Bullard will become a voting member of the Federal Open Market Committee in January.
The remarks come after mixed comments from various Fed members over the past couple of days, with centrist Dennis Lockhart reiterating the case for an interest rate lift-off this year and Lael Brainard calling for no change given downside risks.
"The Fed — certainly they didn't raise rates but it was a temporary pause. We are closer to a tightening cycle than a loosening cycle," said Doug Cote, chief market strategist at Voya Investment Management.
The Democrat Presidential debate comes in the evening.
In economic news, as stock market volatility raised concerns about sales growth, the National Federation of Independent Business said Tuesday. The organization said the level was consistent with a 2.5 percent annualized growth rate.
The bond market reopened Tuesday after the Columbus Day holiday.
Treasury yields edged lower, with the 10-year yield at 2.04 percent and the at 0.61 percent.
The closed down 13.77 points, or 0.68 percent, at 2,003.69, with health care leading all 10 sectors lower.
The Nasdaq closed down 42.03 points, or 0.87 percent, at 4,796.61.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, crept above 17.5.
About 11 stocks declined for every four advancers on the New York Stock Exchange, with an exchange volume of 856 million and a composite volume of 3.3 billion in the close.
Gold futures settled up 90 cents at $1,165.40 an ounce.
—Reuters and CNBC's Katy Barnato contributed to this report.
Correction: An earlier version of this story misstated when the Treasury's monthly budget statement was due. It is scheduled for release Thursday.
On tap this week:
Earnings: Intel, JPMorgan Chase, CSX
Earnings: Bank of America, Wells Fargo, Netflix, Delta Air Lines, BlackRock, ASML Holding, PNC Financial Services
7:00 am: Mortgage applications
8:30 am: Produce price index
8:30 am: Retail sales
10:00 am: Business inventories
2:00 pm: Fed's Beige Book
Earnings: Citigroup, Goldman Sachs, UnitedHealth, US Bancorp, Schlumberger, Mattel, Advanced Micro Devices, Philip Morris, BB&T, Blackstone, Charles Schwab, WD-40
8:30 am: Consumer price index
8:30 am: Jobless claims
8:30 am: Empire State manufacturing survey
10:00 am: Philadelphia Fed business outlook survey
10:30 am: Natural gas inventories
10:30 am: New York Fed President William Dudley speaks
11:00 am: Oil inventories
Earnings: GE, Honeywell, Comerica, Kansas City Southern, SunTrust
9:15 am: Industrial production
10:00 am: JOLTS
10:00 am: Consumer sentiment
10:00 am: Atlanta Fed business inflation expectations
1:00 pm: Oil rig count
4:00 pm: Treasury International Capital
More From CNBC.com: