Markets Pull Back

The recent stock rally flagged Tuesday in New York and around the world amid concerns over China’s economic growth and the impact of high oil prices on consumers and businesses.

The Standard & Poor's 500-stock index dropped 0.8 percent in early trading, while the Dow Jones industrial average fell by the same ratio, or about 100 points. The Nasdaq composite index lost 0.9 percent.

Over the past few weeks, stocks have been buoyant as economic figures from the United States were upbeat and concerns over Europe’s debt crisis eased after Greece received a second huge bailout. Many stock indexes were trading at multimonth highs, while the main Wall Street indexes were at their highest levels in nearly four years.

But investors on Tuesday appeared skeptical that more gains can be sustained in the near term.

“There seems to be an underlying feeling of caution at the moment as investors struggle to find reasons to increase this current rally further,” said Simon Furlong, a trader at Spreadex.

Yields on United States Treasury bonds, which move opposite their price, continued to rise. The rate on the 10-year was up 5 basis points to 2.345.

In Europe, the DAX in Germany was down 1.2 percent in afternoon trading, while the CAC 40 in France was 1.2 percent lower. The FTSE 100 index of leading British shares was down 1.1 percent.

In the risk-averse trading environment, the euro also suffered, trading was 0.3 percent lower at $1.3191.

Earlier in Asia, sentiment was hit by news that house prices dropped in 45 Chinese cities in February as the government implemented measures to cool property speculation. The Shanghai composite index ended 1.4 percent lower.

“Concerns about Chinese economic growth are resurfacing,” said Neil MacKinnon, global macro strategist at VTB Capital.

Elsewhere in Asia, trading volume was low because Japan’s markets were closed for a national holiday. The Hang Seng index in Hong Kong fell 1.1 percent and the Kospi in South Korea retreated 0.2 percent.

Investors around the world were also keeping a watch on developments in oil markets amid fears that rising prices may hamper the global econcomic recovery and stoke inflation.

On Tuesday, China raised the price of retail gasoline for the second time in two months. Though the benchmark New York rate was 63 cents lower at $107.46 a barrel, prices remain at elevated levels.