Stocks fell on Thursday after President-elect Donald Trump disappointed investors during his first news conference since July, while Wall Street geared up for the start of earnings season.
"I think we're moderating some of the moves we've seen over the past few weeks, and that's OK," said Art Hogan, chief market strategist at Wunderlich Securities. "We've baked in a lot of good news; now we need policy details."
The Dow Jones industrial average closed about 65 points lower, with Goldman Sachs and Walt Disney contributing the most losses. At session lows, the blue-chips index had fallen more than 180 points.
The S&P 500 dropped around 0.2 percent, with financials falling 0.7 percent to lead decliners. Pressuring the financial sector were bank stocks, as the SPDR S&P Bank ETF (KBE) shed 1.3 percent. The Nasdaq composite closed lower for the first time in 2017, falling 0.29 percent.
"Donald Trump's press conference on Wednesday was not what investors wanted to hear, with talk of protectionism and more company bashing not exactly being market friendly," Craig Erlam, senior market analyst at Oanda, said in a note.
Trump took shots at the pharmaceutical industry, which sent health care and biotechnology stocks reeling. He also failed to provide new details on three of his key policies: tax reform, deregulation of certain sectors and fiscal stimulus.
"The market ran to the upside after the election on the prospects of lower corporate and personal taxes, infrastructure spending and other measures," said Ernie Cecilia, CIO at Bryn Mawr Trust. "But the details and timing of said policies are also very important."
So-called safe-haven assets rose on Thursday, with gold futures briefly breaking above $1,200 per ounce, a key technical level. U.S. Treasury prices also rose, with the benchmark 10-year note yield falling to 2.35 percent and the short-term yield slipping to 1.17 percent.
The U.S. dollar fell 0.4 percent against a basket of currencies, with the euro near $1.062 and the around 114.6.
"With the engine behind the Dollar's aggressive appreciation partly attributed to optimism over Trump boosting US growth via fiscal spending, the uncertainty presented yesterday should expose prices to renewed downside risks," said Lukman Otunuga, research analyst at FXTM, in a note to clients.
"While the news conference covered topics about the Russian hacking reports, Trump's separation of his business empire and repeated criticism of the media, the lack of details of the President-Elects administration's plans for economic stimulus simply left Dollar bullish investors empty handed," he said.
Wall Street also braced for the start of earnings season on Friday. Major banks JPMorgan Chase, Wells Fargo and Bank of America are all scheduled to report quarterly results Friday before the bell. "I don't think the banks are going to disappoint, but how are they going to guide?" said Wunderlich's Hogan.
In economic news, weekly jobless claims rose less than expected, while U.S. import prices rose in last month, boosted by higher oil prices. Investors also digested remarks from several Federal Reserve officials.
Philadelphia Fed President Patrick Harker, a voting member of the central bank's policymaking committee, said in prepared remarks three rate hikes are appropriate.
Harker, speaking on the economic outlook before the Main Line Chamber in Malvern, Pa., said 2017 is starting off on a "good foot" and inflation expectations are starting to rally. Still, he said monetary policy is a "limited set of tools" and growth policies are up to elected officials.
Chicago Fed President Charles Evans struck a more cautious note, however. He said Thursday the economy could grow strongly for a bit, bit that it is likely unsustainable. Evans is also a voting member of the Federal Open Market Committee.
Dallas Fed President Rob Kaplan, another voting member, noted in his speech that several of Trump's plans would likely boost productivity in the U.S.. Fed Chair Janet Yellen will address educators at town hall meeting in Washington from 7 p.m.
Overseas, European equities fell, with the pan-European Stoxx 600 index sliding 0.65 percent.
Major U.S. Indexes
The Dow Jones industrial average dropped 63.28 points, or 0.32 percent, to close at 19,891, with Walt Disney leading decliners and McDonald's the biggest riser.
The fell 4.88 points, or 0.21 percent, to 2,270.44 with financials leading seven sectors lower and telecommunications outperforming.
The Nasdaq composite dropped 16.16 points, or 0.29 percent, to end at 5,547.49.
About nine stocks declined for every five advancers at the New York Stock Exchange, with an exchange volume of 787.27 million and a composite volume of 3.414 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded at 11.45.
U.S. crude futures rose 76 cents, or 1.45 percent, to settle at $53.01 per barrel.
—CNBC's Berkeley Lovelace Jr. contributed to this report.
On tap this week:
Thursday
Earnings: Infosys
12:30 p.m. Atlanta Fed's Lockhart
1:00 p.m. $12 billion 30-year bond auction
1:15 p.m. St. Louis Fed President James Bullard
1:45 p.m. Dallas Fed President Rob Kaplan
2:00 p.m. Federal budget
7:00 p.m. Fed Chair Janet Yellen holds town hall with educators
Friday
Earnings: JPMorgan Chase, Bank of America, PNC Financial,Wells Fargo, First Republic Bank, BlackRock
8:30 a.m. Retail sales
8:30 a.m. PPI
9:30 a.m. Philadelphia Fed's Harker
10:00 a.m. Consumer sentiment
10:00 a.m. Business inventories