U.S. stocks closed lower Tuesday, as a reversal in oil prices weighed and after weaker-than-expected Chinese trade data renewed concerns about global growth.

"It's not collapsing but certainly profit-taking which is something markets should do when they've had a dramatic move higher," said Quincy Krosby, market strategist at Prudential Financial.

"The question is how much was built on short covering versus new money coming in," she said.

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The Dow Jones industrial average closed about 110 points lower and the S&P 500 ended about 1.1 percent lower after five straight days of gains.

The Russell 2000, which had led much of the recent rally, also snapped a five-day win streak to close 2.4 percent lower.



Energy closed 4 percent lower to lead S&P 500 decliners, followed by a roughly 2 percent decline in materials. U.S. crude oil futures settled down $1.40, or 3.69 percent, at $36.50 a barrel, after trading higher above $38 early in the morning. WTI had its worst daily performance since Feb. 11.

"I think a little bit of profit-taking after the run-up that we've seen. We're in a bit of a news vacuum this week. Earnings are all done. China trade data was shockingly bad. ... The question keeps coming out. How bad is the slowdown in China?" said Ben Pace, chief investment officer at HPM Partners.



The major averages ended near session lows after recovering much of their losses in midday trade as gains in utilities, telecoms and consumer staples offset declines in energy.

"I think investors, they're finding the safety trade a little more attractive here, definitely with bonds higher, utilities higher, stocks off," said John Caruso, senior market strategist at RJO Futures.

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McDonald's (MCD) and Home Depot (HD) contributed the most to gains in the Dow, while Caterpillar (CAT) and Goldman Sachs (GS) were the greatest contributors to declines. The index briefly fell more than 150 points in intraday trade and then almost turned higher before closing down about 110 points.

The stock market sell-off "was not as bad as it could have given the drop in oil and the China data overnight," said Jeremy Klein, chief market strategist at FBN Securities.

Treasury yields held lower despite an intraday recovery in stocks, with the 2-year yield (U.S.:US2Y) at 0.87 percent and the 10-year yield (U.S.:US10Y) at 1.82 percent.



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"I do think the recession scenario is off the table but I think the equity rally we had was one ... fueled by very short-term technical factors," said Jack Ablin, chief investment officer at BMO Private Bank. "The more investors digest the data, whether economic data, corporate profits, or new data, the less they want to own U.S. large-cap stocks. U.S. equities are priced for a global expansion that is not in the cards."



On Monday, WTI settled higher at $37.90 a barrel, its highest level of the year so far. Gains in energy stocks offset declines in tech to help the Dow Jones industrial average and S&P 500 posted their first five straight days of gains since October.

"Oil prices have picked up a lot ... We seem to have found some relief from that," Pace said. We were "near-term overbought. We needed a catalyst (for profit-taking). The catalyst was China."



China's exports fell 25.4 percent year-over-year in February , more than expected and the largest since May 2009, according to Reuters. The trade surplus was at $32.59 billion in February, versus analysts' expectations of a $50.15 billion surplus.

"I do think the numbers suggest the Chinese economy is weaker than the government says it is," said David Kelly, chief global strategist at JPMorgan Funds. "From a global perspective, I'm somewhat encouraged by the NPC. The statements the government have been making to that congress suggests they are very focused on … economic growth at the cost of missing some of their goals."



Analysts largely attributed the sharp drop in the data to a slowdown in business activity around the early February Lunar New Year holidays, Reuters said. Exports for the first two months of the year were still down 17.8 percent and imports off 16.7 percent from the same period last year.