U.S. stocks closed down on Wednesday for the second day in a row as investors stepped back after a recent rally ahead of jobs data due later in the week.
Healthcare stocks were the only bright spot in the market after a U.S. Supreme Court hearing and a cancer drug approval.
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Equities had surged in February and both the Dow and S&P hit record highs on Monday, when the Nasdaq surpassed the 5,000 level for the first time in 15 years.
"We would not read anything into today's pullback. The market had a terrific February," said David Katz, chief investment officer at Matrix Asset Advisors, in New York. "We suggest buying into any weakness."
Many investors were holding off on making big bets ahead of a flurry of economic data due in the rest of the week, culminating with the Labor Department's February payrolls report. The jobs report is viewed as a gauge for the timing of the first Federal Reserve interest rate hike in years.
The S&P 500 healthcare index <.SPXHC>, which has risen 5.75 percent since year-end, finished up 0.39 percent Wednesday as investors bet that the Supreme Court may lean toward the Obama administration's view on the Affordable Care Act after the court heard a second major challenge to the law.
"I think that hearing assuaged fears - at least for now - that we were headed for overturning of Obamacare," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
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The U.S. economy continued to expand across most regions and sectors from early January through mid-February, the Fed said Wednesday afternoon in its Beige Book report.
The ADP National Employment Report showed private employers added 212,000 jobs in February, short of the 220,000 forecast, although January's reading was revised upward. Readings on the services sector from Markit and the Institute for Supply Management both pointed to modest growth.
The Dow Jones industrial average <.DJI> fell 106.47 points, or 0.58 percent, to 18,096.9, the S&P 500 <.SPX> lost 9.25 points, or 0.44 percent, to 2,098.53 and the Nasdaq Composite <.IXIC> dropped 12.76 points, or 0.26 percent, to 4,967.14.
About 6.34 billion shares changed hands on U.S. exchanges, below the 6.52 billion average for the last five sessions, according to BATS Global Markets.
Declining issues outnumbered advancing ones on the NYSE by 1,869 to 1,170, for a 1.60-to-1 ratio; on the Nasdaq, 1,586 issues fell and 1,118 advanced, for a 1.42-to-1 ratio.
The S&P 500 posted 17 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 79 new highs and 50 new lows.
(By Sinead Carew; Additional reporting by Caroline Valetkevitch; Editing by Chizu Nomiyama and Nick Zieminski)