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US stocks fell in a broad selloff on Tuesday, with major indexes hitting session lows in afternoon trading, led by losses in the retail sector after disappointing results from Staples and TJX Companies.
All 10 primary S&P 500 sector indexes fell, and nearly three-fourths of Nasdaq-listed names were down for the day.
The S&P 500's top five decliners were all retail stocks, including TJX Cos Inc, down 7.6% at $53.95, after the owner of off-price chain stores TJ Maxx and Marshalls reported lower-than-expected quarterly revenue.
Staples Inc tumbled 12.6% to $11.71 after the office supply retailer posted first-quarter earnings and forecast a decline in sales in the current quarter. The S&P retail index fell 1%.
Other decliners were Urban Outfitters, down 8.8% at $32.98; Best Buy , off 5.6% at $24.66, and PetSmart , down 4.7% at $62.19.
But Home Depot shares rose, up 1.9% at $77.96, after the company's chief financial officer said sales in May were "robust," taking the sting out of its disappointing first-quarter results due to the severe winter.
Dick's Sporting Goods estimated current-quarter earnings way below analysts' average estimate and cut its full-year 2014 adjusted earnings and same-store sales growth forecasts due to weak demand for its golf and hunting products. Its stock plunged 18% to close at $43.60.
The Dow Jones industrial average fell 137.55 points or 0.83%, to end at 16,374.31. The S&P 500 dropped 12.25 points or 0.65%, to finish at 1,872.83. The Nasdaq Composite slid 28.92 points or 0.70%, to close at 4,096.89.
Equities have pulled back more than 1% since the Dow and the S&P 500 hit record closing highs on May 13 as investors look for signs confirming an acceleration in the US economy that many had hoped to see at this point in the year.
For the fourth straight session, the number of Nasdaq-listed companies hitting 52-week lows - 55 - exceeded the number hitting 52-week highs - 38. More than two-thirds of stocks traded on the New York Stock Exchange declined.
"Today was a good reason to sell ahead of the Fed minutes tomorrow and also heading into the long weekend. Traders are already adjusting their positions," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
About 5.7 billion shares traded on all US platforms, according to BATS exchange data, below the month-to-date average of 5.97 billion.
SMALL-CAPS HIT
Small-cap stocks fell after gaining for the past two sessions, with the Russell 2000 off 1.5%, far outpacing the S&P 500's 0.7% decline.
The S&P small-cap index fell 1.4%, with fewer than 30 of the index's 600 components higher for the day. To compare, the S&P 100 index of large-cap stocks fell just 0.6%.
Investors are concerned about the divergence between small- and large-cap performance, worrying that the weakness in small names could spread throughout the market.
The Russell has neared correction territory several times recently, defined as a drop of 10% from a recent closing high. The index is 9.3% below that high, which was reached on March 4.
CAT CLAWS THE DOW
Caterpillar shares dropped 3.6% to $101.56, ranking as the heaviest weight on the Dow after the heavy machinery company said retail statistics for the three-month rolling period ending in April were down 13%.
General Motors shares lost 3.4% to end at $33.07 after the No. 1 US automaker said it is recalling another 2.42 million vehicles in the United States and doubling the charge it expects to take in the second quarter to about $400 million.
In contrast, Aeroflex Holding Corp shares jumped 25.4% to $10.42. British aerospace and defense supplier Cobham is buying the US communications equipment maker for $1.46 billion, including the assumption of Aeroflex's debt.
