U.S. stocks declined on Tuesday, with the S&P 500 backing off from a record close, as investors weighed a decline in consumer confidence and better-than-expected earnings from home-improvement retailer Home Depot.
"The S&P took another run above 1,850 in late morning trade but it was short-lived," Elliot Spar, market strategist at Stifel, Nicolaus & Company, noted in afternoon emailed commentary.
Shares of Boeing fell after U.S. Senator John McCain, R-Ariz., told Reuters that a proposed sale of Apache attack helicopters to Iraq should be reviewed in light of a report that Iraq had signed a deal to sell Iran arms worth $195 million. The White House on Tuesday said it had raised concerns about the reported arms deal with Iraq's government, which denied in a press release that any deals had been inked.
Tesla Motors Model S was the top overall pick among those surveyed by Consumer Reports, while Ford Motor fell to its lowest ranking since CEO Alan Mulally took the helm at the automaker in September 2006. Tesla shares were up nearly 14 percent; Ford shares were slightly lower.
(Read more: Tesla soars, Ford falls)
The market is "basically brushing off that number, which wasn't terrible, but it certainly dipped," Dan Greenhaus, chief global strategist at BTIG, said of the Conference Board's index of consumer confidence, which declined to 78.1 in February from a revised 79.4 reading in January. Economists polled by Reuters expected this month's reading to come in at 80.
Home Depot's shares rose after the home-improvement retailer reported fourth-quarter earnings that beat Wall Street's estimates, and hiked its quarterly dividend by 21 percent. It also offered a fiscal 2014 earnings outlook below expectations. Shares of Macy's rose after the department-store chain reported an increase in fourth-quarter profit.
"The story for the morning, at least in the large cap space, is Home Depot, which is having the biggest impact on the S&P, which is somewhat weighed down by some of the energy names, and Apple," said Greenhaus, who believes equities are likely to trade flat overall in the near term.
(Read more: Can bulls push S&P into record territory?)
The S&P/Case Shiller composite index of 20 metro areas gained 0.8 percent on a seasonally adjusted basis.
"Home prices across the country are now nearly 25 percent off their early 2012 lows but remain nearly 20 percent off the peak from summer 2006," noted Greenhaus.