By Akane Otani and Mike Bird

U.S. stock indexes fell Tuesday, weighed down by a slide in shares of banks and health-care companies.

Investors have backed away from stocks in recent weeks while picking up government bonds as tepid economic data, as well as political tensions around the world, stoked demand for safer assets.

A series of disappointing earnings reports contributed to the retreat in stocks Tuesday, investors and analysts said. With expectations waning for passage of pro-growth policies from the Trump administration, many say continued signs of corporate health will be key to stocks rising.

"The market's taken a bit of a pause lately, and part of that has to do with markets in the U.S. being at the high end of valuations," said Mark Watkins, regional investment strategist at the Private Client Group at U.S. Bank in Park City, Utah. "If we see earnings that miss or are below expectations, that could be a warning sign."

The Dow Jones Industrial Average lost 113.64 points, or 0.6%, to 20523.28. The S&P 500 fell 6.82 points, or 0.3%, to 2342.19, and the Nasdaq Composite lost 7.32 points, or 0.1%, to 5849.47. All three indexes have fallen in four of the past five trading days.

Bank stocks slid after Goldman Sachs Group's first-quarter trading results fell short of those posted by its rivals. Shares of Goldman Sachs fell $10.67, or 4.7%, to $215.59, wiping away about 73 points from the Dow industrials. The KBW Nasdaq Bank Index of leading U.S. commercial lenders dropped 1%.

Bank of America shares initially traded higher, but later slid 10 cents, or 0.4%, to 22.71, after the company reported a higher-than-expected first-quarter profit and adjusted revenue that beat analysts' expectations.

Declines in health-care stocks put further pressure on major indexes, with Johnson & Johnson shedding 3.90, or 3.1%, to 121.82 after the company posted underwhelming sales in the latest quarter. The drop shaved roughly 27 points off the Dow industrials. Health-care stocks in the S&P 500 fell 1%.

"Now is when earnings become critical for the direction of the markets moving forward," said Michael Binger, senior portfolio manager at Gradient Investments. With stocks still trading near their highs, Mr. Binger said he would be watching for not just solid earnings results, but also a pickup in corporate guidance.

Government bonds gained, with the yield on the 10-year U.S. Treasury note falling to 2.177%, the lowest close since Nov. 10, from 2.248% Monday. Yields fall as bond prices rise.

Elsewhere, European stocks dropped after British Prime Minister Theresa May said she would call an early general election, a move some analysts interpreted as an effort to get more leeway in coming exit negotiations with the European Union.

The Stoxx Europe 600 index fell 1.1%. The U.K.'s export-heavy FTSE 100 lost 2.5%, weighed down by a rally in the pound. The U.K. currency jumped 2.2% against the dollar to $1.2841.

In Asia on Tuesday, the Shanghai Composite Index fell 0.8%. Hong Kong's Hang Seng Index fell 1.4%, its largest one-day decline since December.

Write to Akane Otani at akane.otani@wsj.com and Mike Bird at Mike.Bird@wsj.com

(END) Dow Jones Newswires

April 18, 2017 19:36 ET (23:36 GMT)

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