Stocks fall, Dow snaps 4-day winning streak as big tech shares slide

Stocks fell on Tuesday after a volatile session as a decline in big tech shares took the wind out of a market rally that was sparked by optimism over a potential reopening of the U.S. economy. 

The Dow Jones Industrial Average closed 32.23 points lower, or 0.1%, at 24,101.55  to snap a four-session winning streak. The S&P 500 slid 0.5% to 2,863.39 while the Nasdaq Composite dropped 1.4% to 8,607.73. All three of the major indexes were up more than 1% earlier in the day. 

Alphabet fell 3% ahead of its latest earnings release, which was scheduled for after the close. Facebook dropped 2.5% while Amazon slid 2.6%. Netflix shares fell 4.2% while Apple lost 1.6%.

"I think people are selling into the tech earnings," said Peter Cardillo, chief market economist at Spartan Capital Securities. "If those results disappoint, then those stocks can lead the market lower."

"But in general, the market has been resilient lately," Cardillo said. 

Facebook, Microsoft, Amazon and Apple are all scheduled to report earnings later this week. 

Wall Street was coming off of strong gains on Monday, with the Dow closing above 24,000 for the first time since April 17. Monday's gains put the S&P 500 on pace for its biggest one-month gain since 1987 with an 11.4% surge in April. 

A partial reopening of the U.S. economy — in Alaska, Georgia, South Carolina, Tennessee, Texas, and others — boosted investor sentiment on Monday and earlier on Tuesday, with certain U.S. businesses poised to benefit from the first wave of consumers emerging from the coronavirus driven quarantine. 

"The stock market is increasingly reflecting a restart in the economy as more and more states show a willingness to allow some economic activities to come back online," Jim Paulsen, chief investment strategist at The Leuthold Group told CNBC. "Not only did the S&P 500 index post a healthy gain today but it was led by those segments of the marketplace which are most dependent on an economic restart including small caps, high beta stocks, and cyclical sectors like financials, materials, and industrials." 

Stocks that would benefit the most from a reopening led the market higher on Monday and were up again Tuesday. Shares of Simon Property Group and Kohl's rose 10.7% and 6.7%, respectively, after big gains on Monday. Bank stocks such as Citigroup and JPMorgan also rose more than 0.7% each. 

Over the past week, the major averages are all up more than 4%. Those gains have been led by some of the biggest laggards during the coronavirus-induced sell-off. PVH Corp, which owns Tommy Hilfiger and other brands, is up more than 28% over the past week. Expedia has rallied 25% in that time and Nordstrom is up 23%. 

"Over the past few days, you've seen investors shift from a defensive position to navigate the coronavirus shut down of the U.S. economy to looking for opportunities to position for the economic reopening," said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management.

While many investors are bullish on the first wave of reopenings, DoubleLine CEO Jeffrey Gundlach said Monday the market could retest its March low as market participants could be underestimating the social disruptions from the coronavirus.

"I think a retest of the low is very plausible," Gundlach said on CNBC's "Halftime Report." "People don't understand the magnitude of ... the social unease at least that's going to happen when ... 26 million-plus people have lost their job," the so-call bond king added. 

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the U.S. could be in for a "bad fall" season if an effective treatment for the coronavirus is not found by then. He noted the virus is "not going to disappear from the planet."

More than 3 million virus cases have been confirmed globally, according to Johns Hopkins University. In the U.S., nearly 1 million cases have been confirmed. 

Wall Street awaited the latest monetary policy announcement from the Federal Reserve, scheduled for Wednesday at 2 p.m.

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