U.S. stocks dropped Tuesday for the second straight session, with the Dow Jones Industrial Average briefly tumbling more than 160 points in morning trading. The information technology sector and biotech stocks led the morning's declines. Dow component Verizon Communications Inc. (NYSE:VZ) dropped 1.3 percent after the biggest U.S. wireless carrier announced it is buying AOL Inc. (NYSE:AOL) for $4.4 billion.

Shares of AOL soared 18 percent to $50.36 in morning trading following the announcement. 

The Dow (INDEXDJX:.DJI) tumbled 165.06 points, or 0.91 percent, to 17,940. The Standard & Poor’s 500 index (INDEXNASDAQ:.IXIC) fell 17.89 points, or 0.85 percent, to 2,087. The Nasdaq composite (INDEXSP:.INX) dropped 56.19 points, or 1.14 percent, to 4,936.

The S&P 500 Telecommunication Services sector dipped 0.5 percent, with AT&T Inc., Frontier Communications Corp. and Level 3 Communications Inc. all dropping following Verizon’s announcement.   

Chipmaker Intel Corporation (NASDAQ:INTC) was the largest decliner in the blue-chip index Tuesday, falling around 1.7 percent, while Microsoft Corporation (NASDAQ:MSFT), the world’s largest software company, dropped 1.5 percent.

Wal-Mart Stores Inc. (NYSE:WMT) was one of the few gainers in the Dow, adding 1.3 percent.

Meanwhile, the iShares Nasdaq Biotechnology exchange traded fund dropped 1.7 percent, with Amgen Inc. (NASDAQ:AMGN) and Celgene Corporation (NASDAQ:CELG) dropping more than 1 percent; iPhone maker Apple Inc. (NASDAQ:AAPL) also contributed to the Nasdaq’s declines, losing around 1 percent.

The S&P 500 Information Technology sector lost 1 percent, led by declines from semiconductor supplier KLA-Tencor Corp. (NASDAQ:KLAC) and Lam Research Corporation (NASDAQ:LRCX), both losing 2.5 percent.

Greece avoided defaulting on its debt after paying 750 million euros (about $840 million) to the International Monetary Fund, a Greek central bank official told Reuters. However, creditors still fear the country is close to running out of cash and defaulting on its debt.

Notable companies reporting quarterly results after the closing bell Tuesday include Godaddy Inc., the world's largest website registrar, which went public in April.