Stocks struggled Tuesday as worries about a drop in consumer confidence offset better-than-expected result from DuPont. Energy and consumer discretionary were among the weakest sectors.
Apple rose and Walmart fell.
Some experts said the pullback is likely to be only a temporary breather for the markets which have rallied in five of the past six sessions. The Dow has posted triple-digit gains for three consecutive sessions for the first time since December 30, and 31 of 2008 and January 2, 2009.
“After three straight days of 100-point [gains], I don’t know that we power forward from here without some pause, but I think the direction is higher because the economy is on a recovery path,” said Jim Meyer, CIO of Tower Bridge Advisors.
Meanwhile, the Conference Board reported its gauge of consumer confidence fell to 50.4in July from 54.3 in June; economists surveyed by Reuters had expected the index to drop to 51.
Meyer said confidence levels are at the bottom and will improve going forward as the stock market fears and double-dip worries gradually subside.
Consumer spending is crucial to the economic recovery as it accounts for more than two-thirds of economic activity.
"Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves," said Lynn Franco, director of the Conference Board Consumer Research Center. "Given consumers' heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season."
Consumer-discretionary stocks were among the worst performers, with Gap and Best Buy both down more than 3 percent.
Teen chains Abercrombie & Fitch and Delia*'s fell almost 3 percent.
Walmart shares were slightly lower after brokerage Stifel Nicolaus downgraded the retail giant to "hold" from "buy."
"We simply expect Wal-Mart will be 'turning the battleship' for some time due to recent managerial changes," analysts said.
Meanwhile, Stifel upgraded wholesaler Costco to "buy" from "hold."