Health care companies led stocks lower on Wall Street Monday as investors waited for more details on reports that the U.S. and China are moving closer to a deal to resolve their costly trade dispute.
The sell-off was most pronounced in sectors that have shown strong gains over the last two months, including health care and technology. Financial stocks also took heavy losses.
The world’s two largest economies have pulled back from an immediate escalation of their damaging trade war since they started negotiating last month. President Donald Trump postponed a deadline for raising tariffs on more Chinese goods, citing progress in a series of talks.
The S&P 500 index dropped 10.88 points, or 0.4 percent, to 2,792.81. The index, a benchmark for many mutual funds, is still up 11.4 percent so far this year.
The Dow Jones Industrial Average fell 206.67 points, or 0.8 percent, to 25,819.65. The average was briefly down more than 414 points.
The Nasdaq composite lost 17.79 points, or 0.2 percent, to 7,577.57. The Russell 2000 index of smaller companies gave up 14.20 points, or 0.9 percent, to 1,575.44.
Major indexes in Europe finished mostly higher.
The Commerce Department said construction spending edged down 0.6 percent in December amid declines in residential construction and government projects. Even with the December setback, construction spending for all of 2018 reached record levels, though it was the smallest increase seven years.
The construction spending report was good news for homebuilders, which bucked the broader market trend. PulteGroup climbed 3.5 percent, while D.R. Horton rose 3.1 percent.
Technology companies and banks also fell. Salesforce.com sank 3.7 percent and Charles Schwab lost 2.5 percent.
AT&T dropped 2.7 percent on news the telecom company is reorganizing its WarnerMedia unit, which includes HBO and Warner Bros.
Children’s clothing retailer Children’s Place gave investors a dismal forecast after reporting a disappointing fourth quarter. The stock skidded 10.3 percent.
The main issue is competition from dying competitors holding liquidation sales. Rivals Gymboree and Crazy 8 stores have been in the process of shutting down, which means liquidation sales and better deals for shoppers.
Traders bid up shares in gene therapy developer Nightstar Therapeutics 66.1 percent after biotech giant Biogen offered to buy it for $877 million in cash. Nightstar is developing treatments for rare eye conditions.
U.S. crude rose 1.4 percent to settle at $56.59 a barrel in New York. Brent crude, used to price international oils, gained 0.9 percent to close at $65.67 a barrel in London.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.73 percent from 2.75 percent late Monday.
The dollar fell to 111.94 yen from 112.01 yen on Friday. The euro weakened to $1.1325 from $1.1357.
Gold fell 0.9 percent to $1,287.50 an ounce. Silver dropped 1 percent to $15.11 an ounce. Copper declined 0.8 percent to $2.91 a pound.
In other energy futures trading, wholesale gasoline climbed 1.1 percent to $1.75 a gallon. Heating oil added 0.7 percent to $2.01 a gallon. Natural gas slid 0.1 percent to $2.86 per 1,000 cubic feet.