S&P tumbles 2 percent

The S&P 500 dropped 2% on Tuesday as investors took profits following a warning from the top US infectious disease expert that premature moves to reopen the nation's economy could lead to novel coronavirus outbreaks and set back economic recovery.

The index suffered its first decline in four sessions as investors weighed the potential for a second wave of virus infections against hopes that easing of stay-at-home restrictions could ignite a recovery in the US economy, which has been severely damaged by the virus.

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, told Congress that the virus, which has already killed 80,000 Americans, was not yet under control and that there would not likely be a treatment or vaccine in place by late August or early September.

"There is a real risk that you will trigger an outbreak that you may not be able to control and ... could even set you back on the road to try to get economic recovery," Fauci said of premature steps.

And reports of new clusters of coronavirus infections in countries such as China, South Korea and Germany where lockdowns had been lifted appear to have added to worries.

Optimism about an economic recovery and massive stimulus measures have helped the S&P 500 climb about 34% to Tuesday's intraday high from the March 23 low of the pandemic-driven selloff.

Wall Street's three major averages closed around their session lows. The Dow Jones Industrial Average fell 457.21 points, or 1.89%, to 23,764.78, the S&P 500 lost 60.2 points, or 2.05%, to 2,870.12 and the Nasdaq Composite dropped 189.79 points, or 2.06%, to 9,002.55.

The Cboe Volatility Index, known as Wall Street's fear gauge, ended 5.47 points higher at 33.04. It was the biggest one-day point gain for the VIX in more than three weeks.

Among the S&P's 11 major sectors, real estate was the biggest percentage decliner with a 4.3% drop.

Industrials and financials were the next biggest laggards with respective declines of 2.8% and 2.7%.

Helping to drag down the financial sector was a 7.8% drop in BlackRock Inc, after its top shareholder PNC Financial Services Group Inc said it planned to sell its entire 22% stake in the world's largest asset manager.

Online food delivery company GrubHub Inc surged 29% after a person familiar with the matter said Uber Technologies Inc was in advanced talks to buy the company in an all-stock deal.

Declining issues outnumbered advancing ones on the NYSE by a 2.91-to-1 ratio; on Nasdaq, a 2.65-to-1 ratio favored decliners.

The S&P 500 posted nine new 52-week highs and two new lows; the Nasdaq Composite recorded 91 new highs and 42 new lows.

On US exchanges 11.28 billion shares changed hands compared with the 11.36 billion average for the last 20 sessions.