While the market was trading weak, Joe Saluzzi at Themis Trading in Chatham, N.J., said it could be worse given the sluggish U.K. GDP report, and news within a report on consumer confidence Tuesday that consumers expect inflation to rise 5.5 percent in the next 12 months.
"There's still some nervousness out there, people are anticipating a pullback," Saluzzi said. But, he added, at "any sign of an uptick, they’ll jump back in."
Saluzzi also pointed to disappointing earnings from Texas Instruments , American Express, VMWare and TellLabs .
According to Saluzzi, a few key names, such as Google and Apple , were supporting the market. Still, many of the so-called momentum stocks, while weaker, were still trading near 50-day moving averages, Saluzzi said, an indication they were not selling off just yet.
VMWare was among the momentum stocks that have stalled. The cloud computing company reported strong quarterly earnings Monday, but investors focused on news it doesn't expect margins to expand. Two brokerages boosted price targets for the stock, however. TellLabs plummeted after the telecommunications company reported a 38 percent drop in gross margins from 45.3 percent the quarter before, due to charges. Profits fell 24 percent, due to the charges from excess purchase commmitments, as revenue fell 7.4 percent.
And storage cloud-computing company EMC also declined despite a 61 percent jump in fourth-quarter profit as revenue and margins grew.
Earnings from several big-cap stocks were released before the market opened. DuPont , which came in at 50 cents per share for the fourth quarter, well above the 32 cents per share forecast by analysts surveyed by Thomson Reuters. Revenue at the diversified agricultural and chemicals company was $7.4 billion, also higher than the $6.9 billion forecast. Shares edged higher.
Travelers also gained after reporting earnings above analyst forecasts.
3M declined despite reporting earnings of $1.28 per share, a penny ahead of estimates, on $6.7 billion in revenue, a 9.6 percent annualized increase. The company also raised its full-year forecast.
Verizon gained after reporting a bigger-than-expected increase in wireless subscribers. And Johnson & Johnsonslumped after reporting a plunge in sales for consumer producers in the wake of several product recalls.
Of the 131 companies that have reported earnings so far this year, 71 percent have beaten Wall Street estimates.
Also in economic news, the Federal Reserve kicks off its first meeting of 2011 on Tuesday. The Fed is expected to move ahead with plans to complete its $600 billion bond buying program.
The IMF said on Tuesday a package of US tax cuts should give a lift to a global economic recovery that had already begun to gain speed late last year. It revised its world growth forecast higher.
The U.S. Treasury will auction $35 billion in 2-year Treasury notes at 1 p.m.
President Obama gives his State of the Union address Tuesday evening. He is expected to strike a centrist tone and highlight job creation and American competitiveness.
After-the-bell earnings reports were expected from Yahoo, Norfolk Southern, Juniper Networks and Stryker and Gilead Sciences.
In U.S. economic news, the Conference Board, a private industry group, said a measure of consumer confidence jumped to 60.6 in January, its highest level since May. Economists had expected the index to rise slightly to 54.3, from an upwardly revised 53.3 in December, according to Reuters. Stocks briefly moved into positive territory after the news.
Also, the Richmond Federal Reserve reported a slowdown in manufacturing activity, as a manufacturing index fell to 18 in January from 25 in December.
The Standard & Poor's/Case-Shiller composite indexof home prices fell for the fifth month in a row in November, indicating a double-dip in home prices may be confirmed by spring, the group said. The index of 20 metropolitan areas fell 0.5 percent in November from October on a seasonally adjusted basis, although economists had expected the index to slip 0.8 percent, according to Reuters. For the year, prices have dropped 1.6 percent.
Bad news from overseas also pressured the U.S. markets, including news that troubled Spanish banks will need more capital to stay afloat, as well as the U.K.'s weak GDP report
European stocks closed lower Tuesday, with banks lower on worries about exposure to the peripheral economies of the euro zone and after new data showed Britain’s economic growth slowed in the fourth quarter. The FTSEurofirst300 Index fell 0.6 percent.
On the Calendar This Week:
TUESDAY: President Obama's State of the Union address; consumer confidence, Richard Fed business activity survey, state-by-state unemployment, two-year Treasury note auction, API weekly report; Bank of Japan monetary policy meeting; after-the-bell earnings from Yahoo!
WEDNESDAY: Davos/World Economic Forum; mortgage applications, new home sales, oil inventories, five-year Treasury note auction, FOMC announcement; earnings before-the-bell from Boeing, United Technologies, Xerox; earnings after-the-bell from Netflix.
THURSDAY: Durable goods, jobless claims, pending home sales, natural gas inventories, seven-year Treasury note auction, money supply; before-the-bell earnings from AT&T, Caterpillar, and Colgate-Palmolive; after-the-bell earnings from Microsoft.
FRIDAY: GDP (first reading), consumer sentiment; NBCU/Comcast deal closes; before-the-bell earnings from Chevron and Honeywell.
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