NEW YORK — A recurrence of investors' anxiety about the economy gave Wall Street its biggest loss in five weeks.
The major indexes fell 1 percent Tuesday as investors feared that the market's steep gains in the past month could unravel if the economy doesn't show more signs of strengthening. Warnings about the health of banks and uneasiness ahead of the Federal Reserve's economic statement today led investors to dump financial stocks and wade into defensive areas like consumer staples companies and government debt.
Meanwhile, a record 10th straight monthly drop in wholesale inventories brought a fresh reminder that a recovery in the economy is likely to be gradual.
But many analysts said investors weren't panicking. They were taking a much-needed pause following a rally that seemed to be going at breakneck speed.
"This sort of give-and-take is quite healthy," said Erik Davidson, managing director of investments at Wells Fargo Private Bank in Carmel, Calif. "You're up 50 percent in five months. That's 10 percent a month. In quote-unquote normal markets that's five years' worth of returns."
Investors were waiting to see what the Fed had to say about the economy when the meeting concludes.
The Dow Jones industrial average fell 96.50, or 1 percent, to 9,241.45. The broader S&P 500 index fell 12.75, or 1.3 percent, to 994.35.
The Nasdaq composite index fell 22.51, or 1.1 percent, to 1,969.73.
Crude oil fell $1.15 to $69.45 a barrel in New York.
Overseas, Britain's FTSE 100 fell 1.1 percent, Germany's DAX index tumbled 2.4 percent, and France's CAC-40 dropped 1.4 percent. Japan's Nikkei stock average rose 0.6 percent.