Stocks traded slightly lower, and in a narrow range, throughout much of the session Tuesday, as investors took a breather from a three-day rally as oil prices rose amid ongoing turmoil in Libya and the Middle East.
The Dow Jones Industrial Average fell more than 10 points after trading within a 50-point range all session, and following Monday's rally. The blue-chip index had risen 3.6 percent over the previous three sessions, after falling 4.3 percent from its Feb. 18, 2011 high.
Among Dow components, General Electric and Caterpillar fell, while American Express and Verizon gained.
The S&P 500 fell slightly, trading below 1,300 all day, while the Nasdaq also declined. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell near 20.
Among the S&P 500's key sectors, industrials and consumer discretionary fell, while telecom and utilities gained.
Investors appeared to be taking a pause Tuesday after three consecutive sessions of strong gains reversed a good portion of the losses sustained in the wake of the multiple disasters in Japan.
"I would say the impressive part of that is we handled a lot of very negative news, very unexpected, uncertain news, and saw a relatively minor pullback as a consequence," said Marc Pado, U.S. market strategist and technical analyst at Cantor Fitzgerald.
One reason the market didn't continue to plunge is earnings season is just around the corner, and stocks tend to get a lift before earnings are released, Pado said.
"I think as the market moves to digest all the negative news, what’s new is that there’s positive news around the corner that people have been anticipating," he said.
Pado also pointed to strength in companies such as Caterpillar or Boeing , which are benefiting from capital equipment expenditures triggered by the tax depreciation allowance. His expectation is the market could stall this week, with the S&P 500 trading around 1,300, but that the bull market run will be recharged, and the broad market index could reach 1,385 in the next couple of months.
Oil prices closed higher Tuesday amid unrest in Yemen and after a continuing strikes in Libyaraised fears supplies would be disrupted. London Brent crude closed above $115 a barrel, while U.S. light sweet crude closed at $104 a barrel.
Gold, meanwhile, gained Tuesday to close at $1,427.50 an ounce,while the dollar rose slightly against a basket of currencies.
In Japan, the president of the Tokyo stock exchange told CNBC said the bourse was not considering shortening trading hours to deal with the electricity shortage Japan faces following the devastating earthquake. Shares in Japan rose 4 percenton Tuesday.
The disaster continued to affect several companies and their stock prices. Sony fell slightly after it said it would have to cut or stop production at five more plants in Japan because of supply chain disruptions.
And Toyota shares slipped after the Japanese automaker decided to extend the vehicle-production halt which started on March 14 at all plants in Japan through March 26.
The CTIA wireless conference kicked off in Orlando. The future of , which plunged 14 percent on Monday after AT&T's acquisition of T-Mobile, will be a key topic. Many investors had expected the logical partner for T-Mobile to be Sprint. Meanwhile, Raymond James upgraded Sprint to "strong buy" from "outperform," saying the drop in the stock as a result of AT&T/T-Mobile merger announcement was "overdone."
The CEO of Verizon Wireless , meanwhile, said he had no interest in buying Sprint.
Research in Motion's tablet, the Blackberry Playbook, will go on sale April 19 for $499.
Also on the tech front, Apple sued Amazon.com over the online retailer's use of "App Store", saying Amazon.com improperly used the trademarkto attract software developers.
Netflix gained after Credit Suisse raised the movie rental firm to "outperform" from "neutral." Shares of rival Tivo rose after news hedge fund Citadel Advisors accumulated a 5.3 percent stake in the company, according to a 13G filing.
Bank of New York Mellon traded flat even after news the bank would raise its dividend to 13 cents a share from 9 cents and buy back up to $1.3 billion in stock this year. Fifth Third Bancorp fell despite boosting its dividend to 6 cents a share from 1 cent.
Last week, the Fed told banks the results of stress tests on their capital positions, and indicated whether they could go ahead with dividend increases and stock buybacks, among other decisions affecting capital ratios.
Banks were trading mixed across the board, as most had moved higher in anticipation of dividend increases. JPMorgan and Wells Fargo declined.
On the earnings front, Walgreen fell even after the drugstore chain posted sales above expectations, while Dollar General rose after the retailer's earnings doubled.
After the close, software maker Adobe Systems and credit card company Discover were scheduled to report earnings results.
Shares of Tiffany fell slightly after the luxury jeweler cut its first quarter outlook because it had to close stores in Japan after the earthquake and tsunami. The company reported a 29 percent jump in fourth quarter income on strong demand both domestically and overseas.
And Hot Topic shares gained after the teen apparel retailer said CEO Betsy McLaughlin resigned.
On the health care front, Bristol-Myers Squibb climbed after the biopharmaceutical firm received good news from a trial for its melanoma drug Ipilimumab.
Meanwhile, regulatory pressure prompted Sanofi-Aventis
Goldman Sachs raised its price targets on health insurers Aetna , Cigna , Humana and UnitedHealth . However, shares traded mixed.
In economic news, the Federal Housing Finance Authority said home prices fell 0.3 percent in January from December, and the Richmond Fed Index came in at 20 for March, down from 25 in February.
European shares closed higher, lifted by energy companies benefiting from higher oil prices.
On Tap This Week:
TUESDAY: After-the-bell earnings from Adobe and Discover.
WEDNESDAY: Caterpillar analyst meeting; annual meetings for Disney, HP and Starbucks; mortgage applications, new home sales, oil inventories; before-the-bell earnings from General Mills.
THURSDAY: EU summit; durable goods, jobless claims, natural gas inventories, 10-year TIPS auction, money supply; before-the-bell earnings from Best Buy and ConAgra; after-the-bell earnings from Oracle, Research in Motion.
FRIDAY: USDA food prices outlook; GDP revision, corporate profits, and consumer sentiment.
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