US stocks fell on Tuesday as investors sold richly valued technology shares like Apple Computer Inc and strong economic data on home sales and factory orders revived fears of more interest-rate increases by the Federal Reserve.
Apple shares dropped 2.2 percent to end at $68.10, weighing on the Nasdaq. Shares of Internet search company Google Inc shed 4.7 percent, its biggest one-day percentage loss in a year, to close at $403.54.
"Tech stocks have had a nice rally," said Todd Leone, head of listed trading at S.G. Cowen.
"The stocks that have acted very well, that have driven this market up, which are financials and the techs and, to some extent, the retailers were a little bit heavy today."
The Dow Jones industrial average was down 2.56 points, or 0.02 percent, at 10,888.16. The Standard & Poor's 500 Index was up 0.02 point at 1,257.48. The technology-laced Nasdaq Composite Index was down 6.66 points, or 0.30 percent, at 2,232.71.
The Commerce Department reported that October durable goods orders rose 3.4 percent on a surge in demand for aircraft. Economists had forecast orders for durable goods to rise by 1.1 percent.
That news along with other data showing record new home sales suggested strength in the economy and that the Fed still had room to raise rates. In the bond market, prices fell and yields moved higher.
Stocks sensitive to swings in interest rates fell, including mortgage company Countrywide Financial Corp, which slid 2.9 percent to end at $35.25.
"Sentiment got a bit one-sided and we are kind of in the process of consolidating (the recent gains)," said Steve Goldman, market strategist, Weeden & Co.
"You did have some good news from housing sales, but bond prices have declined by a dollar and rates are up, and that's tempered the enthusiasm," he added.
Volume was heavy on the NYSE where about 1.61 billion shares changed hands, above last year's daily average of 1.46 billion. On the Nasdaq, volume was about 1.77 billion compared with last year's daily average of 1.81 billion.
Advancers outnumbered decliners by a ratio of about 3 to 2 on the NYSE. Gainers and decliners were nearly even on the Nasdaq.