Stocks fell sharply, halting a run at new highs in the Nasdaq market, as investors remained antsy about interest rates and company profits for the nearly finished quarter.
The Dow Jones industrial average fell 94.35, to 10,721.63, after an afternoon rebound attempt failed.
Broader stock indicators also posted steep losses. The technology-heavy Nasdaq composite index came within 10 points of its April 26 closing record of 2652.05 but finished the day 50.02 lower at 2580.26. The loss ended a five-session winning streak that boosted the index by 232 points, or nearly 10 percent.
Analysts said investors are growing hesitant before the impending rush of company reports on the second quarter, which concludes at the end of this month.
"We're very choppy ahead of the earnings season," said Tony Dwyer, chief equity strategist at Ladenburg Thalmann & Co. But, he added, since there haven't been that many major warnings from companies, "earnings should be good."
Meanwhile, with no new economic data released today to steer the market, investors also focused on next week's meeting on inflation and interest rates at the Federal Reserve.
The Dow slid 39 points on Monday as the yield on the 30-year Treasury bond, a key influence on interest rates, bobbed back over 6 percent. In today's trading, the yield edged higher again, to 6.06 percent from 6.02 percent, as the price fell $4.69 per $1,000 invested.
Higher interest rates tend to unnerve the stock market because they lower corporate profits.
Heavy industrial companies that are particularly sensitive to the economy's pace led the Dow's decline today. DuPont fell 2-7/16, to 67 3/4; International Paper fell 1 7/8, to 52 5/8; and AlliedSignal fell 1-9/16, to 66 1/2.
Among leading technology names, IBM fell 1 3/8, to 123 3/8, after jumping 4 points on Monday as the Dow's strongest component. In Nasdaq trading, Cisco Systems fell 2 1/8, to 59 1/2, and Microsoft fell 2-7/16, to 86 1/2, after big gains on Monday.