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S&P 500 posts first 3-day losing streak since August

Key Points
  • The Nasdaq composite also notched a three-day losing streak.
  • The information technology sector closed 0.2 percent higher and was the only advancing sector on the S&P 500.
Tech stocks rebound while major markets tumble

U.S. equities closed lower on Tuesday as a gain in tech stocks failed to lift the broader market higher.

The declined 0.4 percent to 2,629.57, with telecommunications, industrials and utilities lagging. The index posted its first three-day losing streak since August.

The information technology sector closed 0.2 percent higher and was the only advancing sector. Facebook, Netflix and Google-parent Alphabet all closed higher.

The Dow Jones industrial average finished 109.41 points lower at 24,180.64.

The Nasdaq composite erased earlier gains, slipping 0.2 percent to 6,762.21. The index also notched a three-day losing streak.

"We saw some short covering in tech earlier in the session. That cover is fading," said Dave Lutz, head of ETF trading at JonesTrading. He also noted that commodities, specifically metals, are down broadly on Tuesday.

Tech — the best-performing sector this year — has taken a hit recently, sliding about 4 percent over the past week, as investors digest a major tax bill passed by Senate members.

Trader Peter Tuchman works on the floor of the New York Stock Exchange, (NYSE) as the Dow Jones Industrial Average crosses 24,000, in New York, U.S., November 30, 2017.
Brendan McDermid | Reuters

The Senate passed a key bill over the weekend that moved the Republicans closer to overhauling the corporate tax system and significantly lower corporate taxes.

"What we saw was the market moving into stocks that clearly benefit from lower corporate taxes," said Quincy Krosby, chief market strategist at Prudential Financial.

Financials, meanwhile, are up more than 3 percent over the past week. In theory, the proposed changes would help banks and financials more than tech companies, since they currently pay a higher effective tax rate.

"It seems like since we've entered December, there has been some reallocation in the market," said Daniel Deming, managing director at KKM Financial. "There seems to be a lot of churning underneath of what is a pretty calm surface."

Investors also looked ahead to a potential government shutdown. If Congress fails to craft a deal on government spending by the end of the week, the federal government could close until a deal is struck.

In corporate news, Snap shares shot 10.1 percent higher after Barclays said the social media could hit a "turning point" in 2018.

McDonald's stock gained 1.4 percent to lead the Dow after Jefferies upgraded it to buy from hold. In a note to clients, they said McDonald's "use of data and technology … should attract a higher multiple over time, while leading to higher returns."

Disney fell nearly 3 percent after CNBC's David Faber reported it was close to buying key assets from 21st Century Fox.