Stocks Close Lower Breaking Record Tuesday Winning Streak Despite Late Day Surge

Stocks closed lower in the United States on Tuesday for the first time in an astounding 20 weeks. The drop in stocks broke the S&P 500's longest Tuesday winning streak since 1971 and the Dow Jones Industrial Average's and NASDAQ's longest such streaks on record.

The S&P 500 closed lower by 0.56 percent at while the Dow dropped 77.79 points or 0.51 percent. Stocks did lodge a late day rally after trading down through most of the afternoon but still could not regain positive territory. Technology was the weakest of the major Dow sectors as tech stocks dropped 0.93 percent and energy stocks tracked closely behind as they fell 0.5 percent.

Stock Movers

Microsoft MSFT shares declined 1.69 after making a new 52-week high this morning. Further, the stock completed an outside-reversal pattern in which the stock makes a new high and then closes below the previous day's low, a very bearish technical indicator.

IBM IBM shares contributed to the decline in the Dow as shares fell 1.32 percent. The company today announced the $2 billion acquisition of cloud computing firm SoftLayer in a deal aimed at beefing up the company's cloud computing efforts.

Notably, AT&T T shares bucked the trend in Tuesday trade as shares closed higher by 1.71 percent. Investors flocked to the company in a bid for safety and the for yield in the company's 5.05 percent dividend.

Record Setting Streak Tapering Fears

The Dow Jones Industrial Average broke its longest Tuesday winning streak ever having gained the previous 20 Tuesdays before falling today. The NASDAQ also posted its longest streak of winning Tuesdays while the S&P 500 posted its longest winning streak of Tuesdays in four decades.

The streak, which stretched back to January 2013, coincided with the Federal Reserve's new easing policies. The Fed announced that it would increase the pace of asset purchases from $45 billion in mortgage backed securities to $85 billion per month, the additional $40 billion in purchases coming from outright purchases of U.S. Treasuries.

Markets have been jittery in recent weeks on the notion that the Fed may pull back from its extraordinary stimulus in small amounts by reducing the total amount of monthly purchases. These actions, known as tapering of purchases, would only occur as the economy improves, Fed officials have said.

Kansas City Federal Bank President Esther George, a noted hawk within the Fed, was expected to speak today but came down ill and the text of her speech was released this afternoon. In the speech, she proposed slowing the pace of purchases now as she sees the economy improving and is afraid that the Federal Reserve has already done too much in the way of easing.

George is the latest Fed official to come out in favor of tapering now, however key players on the Federal Open Market Committee, including Chairman Ben Bernanke and Vice-Chairman Janet Yellen, still support keeping the proverbial pedal to the medal. Goldman Sachs Chief Economist Jan Hatzius, in an interview with the Financial Times today, indicated that he expects the Fed to begin tapering purchases no sooner than December and sees this as the earliest possible date contingent on the economy not worsening.