Stocks of financial and basic materials companies led Wall Street lower on Tuesday after rallies by those groups this year, while the retail sector hit a record even as retail sales rose less than expected last month.
The weaker-than-expected gain in January retail sales was due in part to discounting in auto sales, but a rebound in an underlying measure of sales underscored the U.S. economic recovery's strength.
The S&P retail index <.RLX> edged up 0.2 percent to its highest on record.
Bank shares fell before a meeting of euro zone finance ministers on Wednesday to decide on a 130 billion euros bailout for Greece to avert a chaotic default.
Greece is still very unsettled, and it makes perfect sense people are taking money out of financials, said Ken Polcari, managing director at ICAP Equities in New York, citing nervousness about the outcome of Wednesday's meeting.
On Monday, the S&P 500 rose near a seven-month high and was up more than 25 percent from a low in early October. The benchmark index has encountered strong resistance in the 1,355-1,360 area.
The market is not falling apart. People are just taking some money off the table, Polcari said.
Financials <.GSPF> led declines on the S&P 500 with a 1.2 percent drop but are up 11 percent this year. Bank of America
Basic materials shares <.GSPM>, up almost 10 percent so far in 2012, were down 1 percent.
The Dow Jones industrial average <.DJI> fell 31.49 points, or 0.24 percent, to 12,842.55. The S&P 500 Index <.INX> lost 5.05 points, or 0.37 percent, to 1,346.72. The Nasdaq Composite <.IXIC> dropped 13.28 points, or 0.45 percent, to 2,918.11.
Moody's Investors Service put Britain's Aaa credit rating in jeopardy for the first time late on Monday. The agency also cut its outlook on the top-tier ratings of France and Austria and downgraded the ratings of six euro-zone nations, including Spain and Italy.
Data from Germany suggested Europe's bulwark economy is picking up its pace. The ZEW economic think tank's monthly poll of economic sentiment jumped to 5.4 from minus 21.6 in January, well above the consensus forecast in a Reuters poll of analysts.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)