American stocks fell on Tuesday as the market’s recent rally cooled off amid a sharp decline in drug store shares and disappointing economic data.
The Dow Jones Industrials stumbled 167.09 points to 29,783.35, after Monday’s record close.
The S&P 500 also came off its all-time high, losing 17.38 points to 3,609.53
The NASDAQ dropped 24.79 points to 11,899.34.
Shares of pharmacy owner CVS Health and Dow-member Walgreens Boots Alliance dropped after Amazon launched a pharmacy business, which allows free delivery of medications for Prime members. Walgreens shares dropped 9.6% and CVS lost 8.6%. Amazon shares gained 0.2%.
Home Depot added to the decline, falling 2.5% despite a third-quarter earnings beat. Its sales also surged about 24% compared with a year ago as pandemic home improvement buying continued. Walmart dipped as well, closing 2% lower even after posting better-than-expected results for the previous quarter.
Sentiment also took a hit after data showed retail sales increased less than expected in October. Retail sales rose 0.3% last month, versus a 0.5% gain expected by economists polled by Dow Jones.
Tesla shares bucked the market’s negative trend, jumping 8.2% after S&P Dow Jones Indices said the electric car maker would join the S&P 500 index, effective Dec. 21. It was a long anticipated move for the surging stock. Before Monday, the shares had already more than quadrupled this year.
The recent outperformance in value stocks comes even as the number of coronavirus cases continues to increase, dampening the country’s near-term economic outlook.
A survey conducted by Bank of America found that fund managers have become too optimistic about the prospects of a coronavirus vaccine, leading the bank’s top strategists to suggest investors sell the news on those developments.
Prices for the 10-Year Treasury were lower, raising yields to 0.87% from Monday’s 0.91%. Treasury prices and yields move in opposite directions.
Oil prices edged higher seven cents to $41.41 U.S. a barrel.
Gold prices slipped $6.70 to $1,881.10