Stocks pull back, breaking a winning streak for the S&P 500

Investors dumped stocks from the start of trading, then picked up their selling near the close.

Shares of Dow components Exxon and Chevron fell more than 2 per cent. The S&P 500 energy index dropped 4.1 per cent.

US stocks also ended near the day's lows on Tuesday as energy shares tumbled, losing steam after hitting a two-month high on Friday. Apart from the energy and materials sectors, telecoms and health-cares stocks were also trading higher. Murphy Oil plunged 15 percent and oil rig operator Transocean lost 10 percent.

Shares in Volkswagen are dipping in Germany after the U.S. Department of Justice was reported to be planning to use a bank fraud law to pursue a case against the automaker over its emissions scandal. "There is no acceleration in growth".

The Dow Jones Industrial Average declined 98 points, or 0.6%, to 16976 shortly after the market opened. The S&P 500 fell 12.91 points, or 0.64 percent, to 1,988.85. Data showed Japan's economy contracted at a slower pace than initially estimated at the end of last year.

He said the oil market is finding a footing and that is allowing stocks in the sector to bounce.

"There's been a collective sigh of relief after starting the year in such a sloppy manner", said Gordon Charlop, managing director at Rosenblatt Securities. We needed a catalyst (for profit-taking).

The NYSE Composite's primary exchange traded 1.1 billion shares with total volume of 4.9 billion.

Financial markets expect the European Central Bank to cut its deposit rate by at least 10 basis points and expand its asset-buying program.

SHAKE QUAKE: Hamburger chain Shake Shack dropped $4.37, or 10 percent, to $37.86 after delivering results and an outlook that disappointed investors.

The euro rose to $1.1058 on Tuesday, it’s highest in more than a week. The dollar edged down to 112.92 yen from 113.27 yen.

The surge was underscored by a short-lived 5.5 percent jump in US crude prices Monday.

Brent moved back above $40 a barrel on speculation the world's largest exporters would agree this month to freeze production and help reduce the largest global build in crude oil in years. On the NASDAQ, 1,607 issues fell and 602 advanced.

Crude prices, which have had a big influence on stocks this year, have rallied sharply in recent days.