Healthcare and materials stocks pulled Wall Street lower on Tuesday in a second straight day of quiet trading as investors cautiously awaited news from the US Federal Reserve's two-day policy meeting.
While the Fed is not expected to raise interest rates at its meeting ending on Wednesday, investors will scour Fed Chair Janet Yellen's comments for clues indicating a path for future rate hikes.
"We're on auto pilot until we actually get the results of the Fed meeting tomorrow afternoon," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "It's not unusual to (be in) wait-and-see mode as you head into a big announcement."
Ahead of the Fed meeting's outcome, smaller stocks sold off more than bigger ones as investors sought to reduce risk, said Mohannad Aama, managing director of Beam Capital Management LLC in New York.
US retail sales fell less than expected in February, but a sharp downward revision to January's data could reignite concerns about the economy's growth prospects.
The Dow Jones industrial average ended up 22.4 points, or 0.13 per cent, at 17,251.53, the S&P 500 lost 3.71 points, or 0.18 per cent, to 2,015.93 and the Nasdaq Composite dropped 21.61 points, or 0.45 per cent, to 4,728.67.
Healthcare was the worst-performing sector, dropping 1.6 per cent.
Valeant Pharmaceuticals International Inc plunged 51.5 per cent to $33.51 in its busiest-ever trading day. The Canadian drugmaker cut its 2016 revenue forecast and flagged the risk of defaulting on its debt, eroding investor confidence in the troubled company.
Allergan dropped 3.4 per cent to $283. The stock was the biggest drag on the S&P 500.
Materials stocks fell 0.91 per cent.
Apple shares climbed 2 per cent to $104.58 after Morgan Stanley said March iPhone demand was tracking ahead of expectations. Apple was the biggest boost to the S&P 500.
Mead Johnson rose 11 per cent to $83.79 with traders attributing gains to a report that sparked deal chatter.
About 6.5 billion shares changed hands on US exchanges, below the 8.2 billion average over the last 20 sessions.
Declining issues outnumbered advancing ones on the NYSE by 2,256 to 787, for a 2.87-to-1 ratio on the downside; on the Nasdaq, 2,114 issues fell and 707 advanced for a 2.99-to-1 ratio favoring decliners.
The S&P 500 posted 19 new 52-week highs and 1 new low; the Nasdaq recorded 30 new highs and 44 new lows.