The Dow and Nasdaq clawed higher Tuesday after several positive analyst comments on Microsoft.
But weakness nagged at the market, particularly the retail sector, after weak outlooks from Home Depot and Target. Plus, investors were parsing a slew of Fed comments.
Microsoft was the best performer on the Dow after several analyst upgrades. Morgan Stanley raised its price target on the stock, citing encouraging demand for Windows 7 and the outlook for the holiday season.
UBS analyst Brent Thill on Monday slapped a "buy" rating and $34 price target on Microsoft stock, which is currently just shy of $30.
Thill also has a "buy" on Adobe and Oracle , with price targets of $43 and $27, respectively.
Telecoms were the only advancers among 10 key S&P sectors today, with gains across the smartphone sector: Palm was up 4 percent, while Leap Wireless was up more than 1 percent. Garmin has been higher for much of the week.
Home Depot was the biggest decliner on the Dow in the morning session after the home-improvement chain beat earnings expectations and raised its full-year outlook but said its markets remain under pressure. And, when you break down their forecast, the fourth-quarter outlook was below consensus.
Caterpillar and American Express rounded out the Dow's bottom three.
Target reported its earnings rose 18 percent, snapping eight quarters of decline, but was also cautious on the fourth quarter amid weak sales results for early November, sending its shares lower.
Consumer-discretionary stocks were among the day's worst performers, with the S&P discretionary-sector index down 1.4 percent.