Health care companies led U.S. stocks broadly lower Wednesday, giving the market its third straight loss.
Technology and energy stocks also bore the brunt of the selling, offsetting gains in materials and utilities companies. Several retailers also rose. Smaller companies fell more than the rest of the market.
The latest market slide came as investors weighed a new survey indicating a lower-than-expected gain in hiring by private U.S. companies last month and data showing the nation's trade deficit widened to a decade-long high in December. The discouraging reports come ahead of a key government report on jobs Friday.
"The market is going through a natural digestion process," said Sam Stovall, chief investment strategist at CFRA. "Some people could be worrying that maybe we are getting closer to an economic slowdown than we thought."
Disappointing economic reports, uncertainty over trade and fears of a slowdown in economic growth have been weighing on the market the past couple weeks.
The market got clarity on some uncertainties over the last month, including the Federal Reserve's strategy and prospects for a U.S.-China trade deal. But investors now face other concerns including a potential global slowdown and increased government debt, said Tracie McMillion, head of global asset allocation at Wells Fargo Investment Institute.
"We're just waiting for some news that will give us some direction," McMillion said.
The S&P 500 dropped 0.7 percent, to 2,771.45. The benchmark index is now on track for its first weekly decline since January. The Dow Jones Industrial Average fell 133.17 points, or 0.5 percent, to 25,673.46. The Nasdaq composite lost 0.9 percent, to 7,505.92.