NEW YORK (CNNMoney.com) - Stocks slumped Tuesday, as investors bailed out of energy, commodities, homebuilding and technology -- the leaders of the recent market advance.

The Nasdaq composite (down 13.84 to 2,244.96, Charts) lost 0.6 percent and the Standard & Poor's 500 index (down 10.24 to 1,254.78, Charts) lost around 0.8 percent.

The Dow Jones industrial average (down 48.51 to 10,749.76, Charts) saw a smaller decline, with strength in component Walt Disney offsetting weakness in Alcoa and General Motors.

Oil stocks, precious metals and commodities were all under pressure, as investors bailed out of the recent stock leaders.

Treasury prices fell, lifting the corresponding yields and the dollar weakened versus other major currencies.

"The worst hit sectors today are the ones that have gone up the most," said Jim Melcher, founder and president at Balestra Capital. "They've had a great rise and so it's normal to see this kind of pullback."

He expects these sectors to bounce back in the near term, due to the continued earnings potential for energy stocks and worldwide demand for commodities and precious metals.

For the short term, the overall market may be under the weather as a result of this cashing out, he added.

The selloff also reflected the broader reluctance that has been in the market since the Federal Reserve policy meeting last week, said Tim Heekin, head of stock trading at Thomas Weisel Partners.

"The lead up to the Fed meeting was that we are going to be done soon, they are going to put the brakes on, and that fueled the momentum," Heekin said. "But now people are realizing that they aren't done yet, and that's shifted the psychology."

He said that this shift is reflected in daily market volume, which is down around 15 percent so far this month from January.

After the close, Cisco (Research) reported quarterly earnings and revenue that rose from a year ago. The results topped analysts' earnings per share expectations and were in line with forecasts for revenue, according to Reuters research.

Cisco shares gained more than 3 percent in extended-hours trading and gave a lift to other tech stocks.

No economic reports are due Wednesday, however, the weekly oil inventory report is set for the mid-morning, and that is often a market mover.

Earnings are due Wednesday from Cigna (Research) before the open, as well as a few other companies.

Nasdaq and S&P futures pointed to a modestly higher open Wednesday, when fair value is taken into account.

U.S. light crude oil for March delivery tumbled $2.02 to settle at $63.09 a barrel on the New York Mercantile Exchange.

Rather than soothe the market, the decline in oil prices added to the day's weakness by sparking a big selloff in the energy sector.

The Philadelphia Oil Service (Charts) sector index lost 6.1 percent.

Components Nabors Industries (down $6.09 to $75.11, Research), Schlumberger (down $7.22 to $117.50, Research) and Noble (down $4.93 to $74.10, Research) led the downward charge.

Aluminum and other metals slipped too, dragging down stocks such as Dow 30 component Alcoa (down $1.16 to $30.87, Research).

COMEX gold for April delivery fell $19.20 to settle at $551 an ounce. Gold stocks such as Phelps Dodge (down $12.66 to $152.53, Research) and Barrick Gold (down $1.31 to $29.00, Research) declined in tandem.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by eleven to five on volume of 1.77 billion shares. On the Nasdaq, decliners topped advancers by roughly the same margin on volume of 2.16 billion shares.

Toll Brothers (down $1.73 to $29.47, Research) slumped after reporting weaker-than-expected quarterly revenue and cutting its 2006 forecast for home sales for the second time.

That took a chunk out of the broader homebuilding sector, with the Dow Jones Home Construction (down $27.64 to $869.08, Research) index losing over 3 percent.

General Motors (down $0.53 to $22.81, Research) lost 2.3 percent after announcing that it has slashed its quarterly dividend in half and cut the salaries of its top executives. Initially, the stock showed little reaction, but it soon turned negative, along with the broader market.

Shares of Conexant Systems (down $0.66 to $2.70, Research) slumped almost 20 percent in very active Nasdaq trade after a federal court jury ruled that the chipmaker deliberately infringed three patents held by Texas Instruments (up $0.08 to $30.62, Research).

On the upside, Walt Disney (up $1.74 to $26.70, Research) shares jumped over 7 percent. Late Monday, the Dow component reported higher earnings in its fiscal first-quarter, while Tuesday it said that selling its ABC Radio network to Citadel Broadcasting in a $2.7 billion cash and stock deal.

Fellow Dow component Coca-Cola (up $0.09 to $41.03, Research) rose modestly after reporting lower quarterly earnings that nonetheless beat analysts' average forecasts.

Treasury prices fell amid a lackluster 3-year note auction. That lifted the 10-year note yield to 4.56 percent from 4.54 percent late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar slipped versus the euro and the yen.

_______________

Click here for the latest business news.