NEW YORK (Reuters) - U.S. stocks fell on Tuesday, as the recent rally lost steam to pull major indexes off record levels, while the trend of modest moves and low volume continued moving into the final trading day of the year.
The day's losses were broad, with each of the ten primary S&P 500 sectors in negative territory. Utilities - 2014's best sector performer - led the decline with a drop of 2.1 percent.
Equities have enjoyed a solid rally of late, buoyed by strong economic data and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. The S&P 500 gained nearly 6 per cent over the prior eight sessions and managed to score its 53rd record close of the year on Monday, while the Dow narrowly missed extending its positive streak to eight sessions.
The speed and scale of the rally could push traders to take profits, and volatility could be amplified with many market participants out for the holiday, which dampens volume. The stock market will be closed on Thursday for the New Year's holiday.
"Just some last-minute profit-taking, tomorrow is the last trading session of the year," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "We had a strong run up and the market kept going up without pausing. There comes a point a time where the market just says,'OK, I need to rest a bit.'"
In the latest economic data, consumer confidence rose slightly less than expected in December, while U.S. single-family home price appreciation slowed less than forecast in October.
The Dow Jones industrial average fell 64.75 points, or 0.36 per cent, to 17,973.48, the S&P 500 lost 10.06 points, or 0.48 per cent, to 2,080.51 and the Nasdaq Composite dropped 30.17 points, or 0.63 per cent, to 4,776.74.