By Ryan Vlastelica
NEW YORK (Reuters) - U.S. stocks fell on Tuesday, with energy shares leading the market lower as crude oil prices declined for a fourth straight day, though major indexes remained near record levels.
U.S. crude fell 2 percent to $77.24 per barrel, dropping to its lowest level in about three years after Saudi Arabia cut sales prices to the United States. This is the fourth straight session that crude has fallen, losing 6.5 percent over that period. It is down more than 30 percent from a recent closing peak.
While the broader market has rallied this year, energy has lagged. The S&P energy index fell 1.7 percent on Tuesday, and it is the only one of the ten primary sectors to be negative on the year. The Energy Select Sector SPDR ETF fell 1.9 percent to $84.43 while Chevron Corp fell 1.4 percent to $115.13.
The decline in oil "has an immediate effect on the energy sector, of course, but it also has implications for the broader market, reflecting a lack of demand," said John Kosar, director of research with Asbury Research in Chicago. "With the market at record highs, you'd like to see oil do better since demand for oil indicates the economy is humming along."
The S&P 500 has a correlation of 0.71 to the energy sector. In October, correlation reached as high as 0.98, indicating the two moved almost completely in sync.
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Alibaba Group Holding rose 1.8 percent to $103.67 after the Chinese e-commerce giant reported its first quarterly results as a public company, posting revenue growth of 53.7 percent. With 23.6 million shares changing hands in the first half-hour of trading, the stock was on track for one of its heaviest days since going public in September.
Priceline Group Inc fell 8.5 percent to $1,096.20 after reporting its results. Regeneron Pharmaceuticals Inc lost 4.1 percent to $379.84 after cutting the top end of its full-year sales outlook.
The market's recent rally, which took both the Dow and S&P 500 to intraday records on Monday, has largely come on strong corporate financial results, which have eased concerns about the pace of economic growth. With results in from 73 percent of companies, three-quarters have beaten analysts' expectations, according to Thomson Reuters data, above the long-term average of 63 percent.
Also in focus is the U.S. midterm election. Investors appear less concerned with whether Republicans take control of the Senate, as expected, or Democrats hang on to their majority by a slim margin. However, volatility may spike if, come Wednesday morning, some races remain so close that the majority party in the Senate is unclear.
In the latest economic data, factory orders fell 0.6 percent in September, as expected. The U.S. trade deficit unexpectedly widened in September.
At 9:57 a.m. (1457 GMT) the Dow Jones industrial average rose 4.3 points, or 0.02 percent, to 17,370.54, the S&P 500 lost 3.55 points, or 0.18 percent, to 2,014.26 and the Nasdaq Composite dropped 8.58 points, or 0.18 percent, to 4,630.33.
Declining issues outnumbered advancing ones on the NYSE by 1,655 to 1,128, for a 1.47-to-1 ratio on the downside; on the Nasdaq, 1,240 issues fell and 1,036 advanced for a 1.20-to-1 ratio.
The S&P 500 was posting 54 new 52-week highs and 4 new lows; the Nasdaq Composite was recording 47 new highs and 16 new lows.
(Editing by Nick Zieminski)