Stocks on Wall Street fell Monday on uncertainty about how quickly the Trump administration will unwind the stimulus measures put in place during the recession.
Strong earnings from several big banks in addition to positive manufacturing reports from across the country on Monday sent stocks soaring in early trading but those gains quickly faded.
Stocks have been riding higher as the economy grew at a faster pace, employers hired more workers and taxes had been cut. As a result, stock prices have rallied. But long-term growth has not been as fast as investors hoped, and stocks are now trading at levels not seen in a decade.
The anxiety is partly stemming from President Trump’s plans to lower corporate taxes and cut taxes for individuals, which could make profits less efficient and boost interest rates to historic highs.
Monday’s slide followed a sharp fall in the bonds market as traders worried about possible higher inflation.
The Dow Jones Industrial Average ended down 96.20 points, or 0.4 percent, at 24,719.15.
The S&P 500 fell 13.90 points, or 0.5 percent, to 2,725.47 and the Nasdaq Composite was down 28.24 points, or 0.4 percent, to 7,165.66.
Stocks slumped on Monday after selling off the previous two sessions.
On Wall Street, Bank of America (BAC), JPMorgan Chase and Citigroup gained in early trading while Wells Fargo (WFC) and Goldman Sachs (GS) fell.
The S&P 500 financial index has soared more than 30 percent since December while the broader S&P 500 is up just 7 percent.
Tech was weaker with the Nasdaq Internet and semiconductor indexes both falling about 1 percent in early trading.
The S&P 500 consumer discretionary index , has had a strong rally in recent months, rising 24 percent since Christmas Eve. The broader S&P 500 is up just 12 percent during the same period.
The interest rate sensitive utilities sector fell 1.4 percent. The sector is up about 12 percent since early August, however.
The third-quarter corporate earnings season kicks off this week.
The index of producer prices accelerated 0.3 percent, its biggest increase since April.
The report was followed by data from several parts of the country that showed broad-based acceleration in factory activity.
Economic growth slowed to 1.3 percent in the third quarter as the impact of the hurricane Harvey lopped off 1.0 percentage point from third-quarter GDP, the Commerce Department said. But growth in the second quarter was revised up to 2.3 percent, the most in nearly four years.
Analysts, however, expect the economy to bounce back strongly in the fourth quarter, powered by tax cuts, federal spending and business investment.
Companies have started to report earnings after the third quarter, which could set the tone for the rest of the season.
Estimates are for earnings to grow 20 percent, a modest rebound from a lackluster quarter in the third quarter.