U.S. stocks closed lower Tuesday, with utilities falling 1 percent, as investors analyzed strong consumer data while keeping an eye on Federal Reserve ahead of Friday's jobs report.
"After coming off of Jackson Hole, ...all the attention is now to the jobs report," said Bob Phillips, managing principal at Spectrum Management Group. "If it comes out to be a decent number, I think the market will sell off."
Economists polled by Reuters expect the U.S. economy to have added 180,000 jobs in August.
Investors continued searching for clues regarding the Fed's next move Tuesday, after Fed Vice Chairman Stanley Fischer said the U.S. job market is almost at full strength. Fischer made his remarks less than a week after telling CNBC that the August jobs report will weigh on the central bank's decision on whether to raise interest rates.
"We are officially in a rate-rising market, even thought it's only been one rate rise," said Larry Rosenthal, president at Rosenthal Wealth Management Group. "People need to go back to basics and ... have lower beta portfolios." "Keep things simple."
The S&P 500 fell 0.2 percent, with utilities leading nine sectors lower and financials the only advancer. The financials sector has risen more than 3 percent in August, leading all 10 sectors.
The Dow Jones industrial average slipped about 50 points, with Boeing contributing the most losses. The Nasdaq composite fell about 0.2 percent. The three major indexes briefly traded higher earlier in the session.
The consumer confidence index for August rose to 101.1, with economists polled by Reuters seeing the number come in at 97.
"The consumer confidence came in strong and that bodes well for the Fed to raise rates," said Peter Cardillo, chief market economist at First Standard Financial, but noted he does not expect the Fed to hike next month, rather later this year. "That shows consumer are cheerful and that spending will remain [high]."
Other data released Tuesday included the S&P CoreLogic Case-Shiller 20-City Composite index, which rose 5.1 percent year over year, versus expectations of 5.2 percent.
"These are the dog days of summer," said Bruce McCain, chief investment strategist at Key Private Bank. "It's a pretty boring time in terms of economic data and the net result is the market doesn't know what to do."
Stocks closed higher on Monday, with the S&P rising 0.52 percent, marking its 36th straight session without a 1 percent move higher or lower on a closing basis. At the close, Monday was on pace for the lowest trading volume day of the year.
"You've basically got the technicality of people being out on vacation and a slow news flow," said Mike Bailey, director of research at FBB Capital Partners. "I think that people are waiting for that jobs number."
"The market has been in a pretty tight range since the middle of July," said Randy Frederick, vice president of trading and derivatives at Charles Schwab. "With yesterday's rally, we're toward the upper end of that."
"We also have the big jobs report due Friday, and the closer we get to that, it's likely the market gets more tentative," Frederick said.
Apple was also on Wall Street's radar, as the Dow component fell 0.77 percent after the European Commission ordered Ireland to recover more than $14.5 billion in back taxes from the tech giant.
"The regulators are unquestionably hungry to make an example of this situation hence we have seen this record amount of fine for a technology firm. But Ireland is defending its position and saying that they will go to court," Naeem Aslam, chief market analyst at Think Markets, said in a Tuesday note.
"Apple has carefully chosen the safest tax heaven, which is Ireland, and if the firm will have to pay this big tax bill, it can change their strategy in the longer term. This could mean substantial job cuts not only in Ireland but also in other European countries as the firm may make the move of moving its offices back to the US," he said.
In oil markets, U.S. crude settled 1.34 percent lower at $46.35 a barrel amid dollar strength.The U.S. dollar rose against a basket of currencies, with the euro near $1.114 and the yen at 102.95. The Japanese currency hit its lowest level versus the greenback since July 29 earlier in the session.
U.S. Treasurys were mixed, with the two-year note yield near 0.79 percent and the benchmark 10-year yield around 1.57 percent.
The Dow Jones industrial average fell 48.69 points, or 0.26 percent, to close at 18,454.30, with Boeing leading decliners and Goldman Sachs the top advancer.
The slipped 4.26 points, or 0.2 percent, to end at 2,176.12, with utilities leading nine sectors lower and financials as the only advancer.
The Nasdaq closed 9.34 points, or 0.18 percent, at 5,222.99.
Decliners were a step ahead of advancers at the New York Stock Exchange, with an exchange volume of 743.34 million and a composite volume of 2.946 billion at the close
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded higher, near 13.
Gold futures for December delivery settled $10.60 lower at $1,316.50 per ounce.
On tap this week:
*Planner subject to change.
Earnings: Palo Alto Networks, H&R Block, Veeva Systems, AeroVironment
Earnings: Brown-Forman, Salesforce.com, Five Below, Shoe Carnival, Bob Evans, National Bank of Greece, Chico's
8 a.m. Minneapolis Fed President Neel Kashkari
8:15 a.m. ADP employment
9:45 a.m. Chicago PMI
10 a.m. Pending home sales
August vehicle sales
3:15 a.m. Boston Fed President Eric Rosengren, Chicago Fed President Charles Evans in Beijing
8:30 a.m. Initial claims; Productivity and costs
9:45 a.m. Manufacturing PMI
10 a.m. ISM manufacturing; Construction spending
12:25 p.m. Cleveland Fed President Loretta Mester
8:30 a.m. August Employment report
8:30 a.m. U.S. trade deficit
10 a.m. Factory orders
1 p.m. Richmond Fed President Jeffrey Lacker