By Akane Otani and Christopher Whittall

The Dow Jones Industrial Average fell Thursday as investors dialed back on some popular trades.

The blue-chip index fell more than 70 points as investors dumped shares of financial companies and snapped up government bonds and gold. The dollar weakened and China's yuan surged.

It's a reversal of some recent trends, largely built on expectations of a higher growth, higher rate environment under President-elect Donald Trump. But in recent weeks, some analysts and investors have questioned whether those positions had gotten crowded.

The WSJ Dollar Index, which measures the currency against 16 others and had recently surged to a 14-year high, was down 0.9% Thursday.

Government bonds rallied, with yields on the 10-year U.S. Treasury note falling to 2.372%, according to Tradeweb, from 2.452% Wednesday. Yields fall as bond prices rise. Gold rose 1.5% to $1,182.50 an ounce.

The S&P 500 financials sector -- among the best performers since Election Day -- fell 1.3%. Declines in Travelers, Goldman Sachs Group, J.P. Morgan Chase and American Express weighed on the Dow industrials.

U.S. stocks flitted between slight gains and losses early in the session, then began sliding toward midday. The Dow industrials fell 75 points, or 0.4%, to 19866 after two consecutive sessions of gains. The S&P 500 fell 0.2% and the Nasdaq Composite rose less than 0.1%.

"Most people are trying to extend this positive sentiment from last year, but we do have some caution in the coming months something couldturn," said Jeroen Blokland, a senior portfolio manager at Robeco, who is taking a neutral stance on equities right now.

Risks that could derail the stock-market rally include a re-emergence of concerns over China's economy or disappointing corporate earnings, he said.

On Thursday, a crackdown by China's central bank on wagers against the yuan sent the currency surging. The yuan's gain came amid a broad rise in Asian currencies against the dollar, which had retreated after minutes from the Federal Reserve's December meeting showed Wednesday that officials were unsure about the potential impact of Mr. Trump's policies on the economy.

Other factors could also have rattled assumptions about higher growth and inflation Thursday.

Private-sector hiring slowed in December, according to payroll processor Automatic Data Processing and forecasting firm Moody's Analytics, a day before the Labor Department's jobs report for Decemberwas due.

Natural gas prices fell after weekly data from the U.S. Energy Information Administration showed stockpiles decreased less than expected.

Meanwhile, shares of consumer-discretionary companies tumbled after retailers including Macy's and Kohl's warned of weak holiday results.

Macy's, which said Wednesday that its same-store sales fell in November and December, fell 14%. Kohl's, which lowered its profit targets, fell 19%, while other retailers including Nordstrom, L Brands and Urban Outfitters fell more than 5% apiece.

Elsewhere, stocks in Europe were little changed, with gains in health-care and telecom shares offsetting losses in financials.

In Asia, Hong Kong's Hang Seng Index rose 1.5% after purchasing managers index reports from China and Hong Kong registered improvements. The Nikkei Stock Average ended down 0.4% after rising 2.5% on Wednesday.

Write to Akane Otani at akane.otani@wsj.com and Christopher Whittall at christopher.whittall@wsj.com

(END) Dow Jones Newswires

January 05, 2017 14:32 ET (19:32 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.