Stocks fluctuated Tuesday despite largely upbeat earnings releases, and news of corporate acquisitions, as the dollar rose slightly.
The Dow Jones Industrial Average was down about 10 points after slipping in Monday's session, off two-year highs.
Chevron and Kraft led the blue-chips lower, while Exxon Mobil and Alcoa rose.
The S&P 500 Index and the Nasdaq were flat. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose to under 18.
Among key S&P sectors, energy, materials and technology stocks rose, while financials and consumer staples fell.
The dollar was up slightly against a basket of currenciesin early trading, aftering rising on Monday. Stocks have been moving inversely to the dollar. Gold, however, continued to rise to a record for the fourth straight session on continued concerns with European debt, and the falling U.S. dollar.
As a result, commodity stocks were mixed, with Freeport-McMoran , and US Steel moving higher, while Newmont Mining fell.
Monday's lackluster market activity was most likely a pause after stocks reached two-year highs last week. One technical reason for the pause could be that the S&P 500, which traded as high as 1,226 on Tuesday, was just under 1,228, which represents "a 2/3 retracement of the entire bear market dating back to fall 2007," said Michael Sheldon, chief market strategist at RDM Financial Group.
Also, the Relative Strength Index, an indicator of whether the market is overbought or oversold, is at 70, "which may indicate a pause or brief correction," Sheldon said.
Moreover, Sheldon thinks the market will continue to move higher.
"I think the impact of QE2 (quantitative easing) combined with the election last week and the somewhat better than expected employment data on Friday, have continued to provide a positive backdrop for equity markets," he said. "Heading into year-end, you could easily have investors pile into the market especially those who may be under invested or who have missed the majority of the recent rally off the summer lows."
In M&A news, Atlas Energy shares soared after news Chevron
would buy the natural gas producerfor $4.3 billion, including debt, giving it a stake in the Marcellus shale fields.
Sara Lee has agreed to sell its North American bakery business to Grupo Bimbo for $959 million. The food product maker also reported weak profit for the third quarter.
Meanwhile, a group of private equity investors reportedly approached the founder of Alibaba Group, the Chinese e-commerce company, to see if he was interested in joining a bid to buy Yahoo , Reuters reported, citing a source close to the situation. Alibaba is 40 percent owned by Yahoo. It's unclear whether the private equity investors were involved in a deal that AOL was said to be considering.
Meanwhile, Dean Foods shares sank after reporting third-quarter earnings plunged 51 percent, well below estimates, and gave a disappointing outlook for the fourth quarter.
In earnings news, Priceline.com's shares soared to the top of the S&P 500 after the online travel agency reported Monday afternoon that third-quarter earnings that were stronger than expected. The company credited a boost in international bookings.
And Tyco International's shares slipped despite posting better than expected results, as its biggest unit, ADT Worldwide.
Marsh & McLennan's shares declined after the global insurance broker's third-quarter profits missed analyst expectations.
LDK Solar's shares soared after the maker of solar wafers reported third quarter earnings tripled from a year ago, and the Chinese company gave a positive forecast for next year.
Solid results from mobile phone operator Vodafone and lender Barclays helped lift Britain's top share index.
Global concerns over the Fed's plans to pump more money into the U.S. economy continued to percolate ahead of the G20-summit meeting of world leaders later this week. On Tuesday, China warnedthe Fed's efforts could create asset bubbles elsewhere.
Also, top Fed officials signaled they were divided on the wisdom of the central bank's $600 billion bond-buying program unveiled last week, with one warning the Fed's bond buying might need to be curbed to head off inflation.
The U.S. economic calendar is light this week. In one positive sign, optimism among small U.S. businesses rose for the third straight month, the National Federation of Independent Business said Tuesday. The organization's small business index rose 2.7 points to 91.7 in October, a figure that is still in recessionary territory.
Also, wholesale trade inventories rose 1.5 percent in September, which was more than expected, while September wholesale sales rose by 0.4 percent, less than expected, the Commerce Department reported.
Coming Up This Week:
TUESDAY: 10-yr note auction, U.S. Supreme Court hears AT&T class action case.
WEDNESDAY: Weekly mortgage apps, Jobless claims, International trade, Import & export prices, Oil inventories, CFTC hearing on Dodd-Frank, 30-yr bond auction, Earnings from GM, Macy’s and Cisco.
THURSDAY: Veterans Day – Bond market closed, stocks and futures markets open, G20 mtg. begins, Earnings from Kohl’s, Disney and Nvidia.
FRIDAY: APEC CEO summit, Consumer sentiment, Earnings from DR Horton and JCPenney.
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