Investing.com -- U.S. stocks fell broadly on Tuesday amid mounting fears of a weakening long-term economic outlook, as the major indices posted their worst two-day decline since early-February.
On Tuesday morning, Monetary Fund managing director Christine Lagarde said Tuesday that the global economic outlook has dimmed over the last six months, citing low inflation, weak growth opportunities, a lack of new jobs and high debt throughout the world. Separately, Federal Reserve Bank of Atlanta lowered its first quarter U.S. GDP growth estimate to 0.4%, from previous forecasts of 0.7% due primarily to soft vehicle sales in March, as well as declines in real consumer spending growth and real equipment investment growth. As a result, gold prices bounced from five-week lows in Tuesday's session while the Japanese Yen soared to one-year highs against the dollar, after investors sought shelter in the safe-haven assets.
The Dow Jones Industrial Average lost 133.68 or 0.75% to 17,603.32, closing near session-lows. It came as the Dow Jones Transportation Average fell 44.53 or 0.57% to 7,772.46, posting its ninth loss in the last 11 sessions. As a result, the Dow Transportation Index moved below its 200-day moving average for the first time in more than a week.
The NASDAQ Composite index, meanwhile, fell 47.87 or 0.98% to 4,843.93, while the S&P 500 Composite index dipped 20.96 or 1.01% to 2,045.17. On the S&P 500 all 10 sectors closed in the red, as stocks in the Utilities and Financials lagged. In total, four industries decreased by more than 1% on Tuesday. The S&P 500 briefly turned negative for the year during the session.
The top performer on the Dow was Pfizer Inc (NYSE:PFE), which added 0.66 or 2.15% to 31.38. Earlier, Reuters reported that the pharmaceutical giant may abandon a $160 billion merger with Allergan Plc (NYSE:AGN) after the U.S. Department of Treasury unveiled new rules on Monday aimed at curbing so-called tax inversion strategies. The new rule limits companies from engaging in the inversions if they have completed the deal over the last three years. In Pfizer (NYSE:PFE)'s case, the company reportedly planned to acquire Allergan (NYSE:AGN_pa) to establish the new company's headquarters in Dublin in an apparent move to reduce its U.S. tax burden.
"This is something that I’ve been pushing for a long time,” U.S. President Barack Obama said at a White House press conference on Tuesday. “When companies exploit loopholes like this, it makes it hard to invest in the kinds of things that are going to keep America’s economy going strong."
The worst performer was Cisco Systems Inc (NASDAQ:CSCO), which fell 0.56 or 1.99% to 27.58. Over the last 52 weeks, shares in the Silicon Valley networking equipment company are up fractionally by 1.34 points or 4.94%.
The biggest gainer on the NASDAQ was Tesla Motors Inc (NASDAQ:TSLA), which jumped 8.01 or 3.24% to 255.00, rallying sharply from a sell-off at the start of Tuesday's session. Tesla (NASDAQ:TSLA) shares popped after CEO Elon Musk blamed the company's failure to meet delivery targets in the first quarter with its top-of-the-line Model X vehicle on excessive hubris. The worst performer was Walker & Dunlop Inc (NYSE:WD), which fell 2.19 or 4.73% to 44.08.
"We put too many new features and technologies, too many great things all at once into a product," Musk said. "I do think there was some hubris there with the X. The net result, however, is that I think the Model X is an amazing car. Honestly, I think it's probably, I think it's the best car ever. I'm not sure anyone's going to make a car like this again."
The top performer on the S&P 500 was Newmont Mining Corporation (NYSE:NEM), which jumped 1.02 or 3.88% to 27.32, after gold halted a two-day losing streak with one of its best sessions in two weeks. Allergan closed as the worst performer after plunging 42.77 or 15.41% to 234.78.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,161-924 margin.