All the 11 primary S&P 500 sectors pulled back, with energy closing down 2.88 percent, leading the losses.
The Dow Jones Industrial Average rose 69 points, or 0.2%, to 29852 shortly after the opening bell.
Financials, industrials and energy stocks gave back some gains made over the last week as positive updates from US vaccine trials encouraged investors to diversify into value stocks on hopes they will benefit from a pickup in the economy. "What is most important is that the vaccine announcement removed some of the long term uncertainty, which had kept investors cautious".
Visit Business Insider's homepage for more stories. "The vaccine news immediately captures the imagination because you see an endpoint". Investors and analysts are now increasingly optimistic about the economy recovering.
The increased risk appetite on the vaccine news also helped oil prices advance, along with hopes OPEC and its allies will delay a planned increase in oil output.
Dow Jones noted that investment funds indexed to the S&P 500 will have to sell approximately $51 billion worth of shares of companies already in the stock market index to buy shares of the electric auto company, in order to add Tesla to the list.
Elon Musk's rising electric auto powerhouse Tesla reached another landmark Monday when it officially qualified for the prestigious S&P 500.
But the gains faded as traders anxious anew about the economic fallout from governments across the USA bringing back varying degrees of restrictions on businesses in response to a recent surge in coronavirus cases. The United States remains the country worst affected by the pandemic. But even if the strictest stay-at-home orders don't return, fear alone of the virus could keep consumers hunkered at home.
In Europe, a coronavirus relief package is being held up by a diplomatic dispute between Hungary and Poland and several other major European Union countries. The FTSE 100 in London added 0.3%.
The dollar index fell 0.167%, with the euro up 0.06% to $1.1868.
Stocks have generally risen over the past month, buoyed by optimism that scientists are getting closer to producing and distributing coronavirus vaccines effective enough to curtail infection levels.
Retail sales in October grew by a disappointing 0.3 percent from last month, according to Commerce Department, which also cut the growth for September.
Prices for the 10-Year Treasury were unchanged, keeping yields at Tuesday's 0.87%.