Banks and other financial companies led a slide in U.S. stocks Thursday, erasing some of the gains from Wednesday, when indexes soared to their latest record highs.
Materials and industrials companies also fell sharply. Energy stocks declined along with the price of crude oil. Utilities and phone company stocks bucked the broader market slide.
Investors mostly focused on the latest batch of company news and earnings reports. Traders had an eye on the Federal Reserve amid growing speculation this week that the central bank would raise interest rates again later this month.
"You have the market wondering if the economy is in fact strong enough for a rate hike at this point," said Quincy Krosby, market strategist at Prudential Financial. "After the run-up we had yesterday, this is a good excuse for the market to pause."
The Dow Jones industrial average fell 112.58 points, or 0.5%, to 21,002.97. The Standard & Poor's 500 index fell 14.04 points, or 0.6%, to 2,381.92. The Nasdaq composite index slid 42.81 points, or 0.7%, to 5,861.22.
Small-company stocks fell more than the rest of the market. The Russell 2000 index sank 17.97 points, or 1.3%, to 1,395.67.
The stock market was coming off its biggest single-day gain in nearly four months.
Bond prices fell, pushing yields higher. The 10-year Treasury yield rose to 2.48% from 2.46%.
Various Federal Reserve officials have signaled recently that they are closer to supporting another rate hike. Earlier this week, New York Fed President William Dudley said the case for raising interest rates had gotten stronger. That has helped fuel speculation that the central bank will raise interest rates again this month.
The central bank raised its benchmark interest rate by a quarter of a point in December. That followed a quarter-point increase in December 2015, which was the first hike in nearly a decade. Fed Chair Janet Yellen and two other Fed officials are scheduled to deliver speeches Friday. Investors will be listening for any hints of what the Fed will do at their policy meeting this month.
"While it's plausible the Fed lets the U.S. economy run hot before acting, the economic backdrop, in our view, warrants a Fed hike in March," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "In a slow-growth, improving environment, we think that's favorable for equities."
Banks, which investors bid sharply higher Wednesday on hopes that higher interest rates would help them earn more from lending, were the biggest losers Thursday.
Citizens Financial Group fell 3.9% to $38.05. Regions Financial slid 3.7% to $15.32. Zions Bancorporation dropped 3.4% to $44.96.
The major stock indexes headed lower from the get-go early Thursday as investors considered results from several companies that reported disappointing earnings or forecasts.
Kroger slid 4.3% to $30.67 after the supermarket operator said business conditions in the first half of 2017 will remain difficult due to low food prices.
Barnes & Noble tumbled 8.6% to $9.05 after the bookseller reported weaker-than-expected earnings and sales of its Nook e-book reader. The company also said business worsened in late January and into the current quarter, and it forecast a bigger decline in sales at established locations.
Shake Shack declined 2.6% to $35.17 after the restaurant chain's sales at established locations and its revenue outlook fell short of Wall Street's forecasts.
Also, Puma Biotechnology dived 13.8% to $32.80 after Swiss drugmaker Roche reported good results from a study of a cancer drug that would compete with Los Angeles-based Puma's experimental drug neratinib.
Some companies fared better.
Monster Beverage jumped 12.8% to $47.37 after the Corona company's latest quarterly earnings and revenue exceeded Wall Street's expectations. It was the biggest gainer in the S&P 500.
Abercrombie & Fitch vaulted 13.9% to $13.32 after the clothing company said its Hollister brand did well in its most recent quarter.
Best Buy climbed 6.4% to $44.85 after rival Hhgregg announced plans to close 88 stores and three distribution facilities.
Investors also jumped at the chance to snap up shares in Snap, the parent company of the Snapchat messaging app. The stock soared 44% in its stock market debut, climbing to $24.48, far above its initial price of $17.
News that federal law enforcement officials executed a search warrant last week of several Caterpillar facilities sent shares in the farming and construction equipment manufacturer sliding 4.3% to $94.36. The company said only that it is cooperating with law enforcement.
In Europe, Germany's DAX slipped 0.1%, while France's CAC 40 rose 0.1% and Britain's FTSE 100 was flat. Earlier in Asia, Tokyo's Nikkei 225 stock index rose 0.9%, while the Hang Seng index in Hong Kong advanced 0.5%.
The price of U.S. crude oil fell $1.22, or 2.3%, to $52.61 a barrel. Brent crude, used to price international oils, fell $1.28, or 2.3%, to $55.08 a barrel.
Wholesale gasoline fell 3 cents, or 2.1%, to $1.64 a gallon. Heating oil slid 5 cents, or 2.8%, to $1.58 a gallon. Natural gas rose 1 cent to $2.80 per 1,000 cubic feet.
The dollar rose to 114.51 yen from 113.71 yen. The euro fell to $1.0501 from $1.0544.
Gold fell $17.10, or 1.4%, to $1,232.90 an ounce. Silver slid 74 cents, or 4%, to $17.71 an ounce. Copper fell 5 cents, or 1.7%, to $2.68 a pound.
3 p.m.: This article was updated with closing prices, context and analyst comments.