By Sweta Singh
REUTERS - U.S. stocks fell in early trading on Tuesday in a broad-based retreat as China's surprise devaluation of the yuan pushed the dollar higher and pressured commodity-related shares.
Oil erased most of its gains from Monday following the devalution by the world's top energy consumer. Other commodities such as copper, aluminum, nickel and zinc also fell.
Eight of the 10 major S&P sectors were down, with the energy index and the materials index both lower by nearly 2 percent.
Exxon Mobil's 1.8 percent drop was the biggest drag on the energy index and Freeport-McMoRan's 12.5 percent slump dragged on the materials index.
Concerns around the health of the second-largest economy in the world also weighed on shares of U.S. automakers and industrials. General Motors was down nearly 3 percent, while Caterpillar was down 2.4 percent.
The yuan fell to its lowest against the dollar in almost three years following what the country's central bank described as a "one-off depreciation".
"We are looking at a pullback right now. The news of the yuan raises suspicion regarding the economic growth outlook for China, that's taking its toll on the markets," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
At 10:09 a.m. EDT (1409 GMT) the Dow Jones industrial average was down 156.87 points, or 0.89 percent, at 17,458.3. The Dow briefly fell more than 1 percent.
The S&P 500 was down 14.34 points, or 0.68 percent, at 2,089.84 and the Nasdaq composite was down 27.23 points, or 0.53 percent, at 5,074.57.
Brent crude was down 2.64 percent and U.S. crude fell 3.29 percent. Prices of commodities such as copper, aluminum, nickel, and zinc slid between 2 and 3.5 percent.
U.S. stocks had climbed on Monday, giving the S&P 500 its biggest increase since May, buoyed by gains in commodity-related shares and optimism over Warren Buffett's deal to buy Precision Castparts.
Apple shares were down 2.6 percent at $116.64 after Jefferies raised concerns about the demand for the iPhone, primarily in China. The stock was the biggest drag on the S&P and the Nasdaq.
Google rose 5.5 percent to $699.11 after it said it would overhaul of its operating structure.
Shake Shack rose 4 percent to $73.46 after the hamburger chain reported better-than-expected quarterly profit and sales.
Terex rose 19.6 percent at $26.10 after the U.S. cranes and mining equipment maker and Finnish rival Konecranes agreed to an all-share merger.
Declining issues outnumbered advancers on the NYSE by 2,137 to 645. On the Nasdaq, 1,820 issues fell and 678 advanced.
The S&P 500 index showed three new 52-week highs and eight new lows, while the Nasdaq recorded 19 new highs and 45 new lows.
(Reporting by Sweta Singh in Bengaluru; Editing by Savio D'Souza)
