U.S. stocks declined on Tuesday, with the S&P 500 backing off from a record close, as investors weighed a decline in consumer confidence and better-than-expected earnings from home-improvement retailer Home Depot.
"The S&P took another run above 1,850 in late morning trade but it was short-lived," Elliot Spar, market strategist at Stifel, Nicolaus & Company, noted in afternoon emailed commentary.
Shares of Boeing fell after U.S. Senator John McCain, R-Ariz., told Reuters that a proposed sale of Apache attack helicopters to Iraq should be reviewed in light of a report that Iraq had signed a deal to sell Iran arms worth $195 million. The White House on Tuesday said it had raised concerns about the reported arms deal with Iraq's government, which denied in a press release that any deals had been inked.
Tesla Motors Model S was the top overall pick among those surveyed by Consumer Reports, while Ford Motor fell to its lowest ranking since CEO Alan Mulally took the helm at the automaker in September 2006. Tesla shares were up nearly 14 percent; Ford shares were slightly lower.
(Read more: Tesla soars, Ford falls)
The market is "basically brushing off that number, which wasn't terrible, but it certainly dipped," Dan Greenhaus, chief global strategist at BTIG, said of the Conference Board's index of consumer confidence, which declined to 78.1 in February from a revised 79.4 reading in January. Economists polled by Reuters expected this month's reading to come in at 80.
Home Depot's shares rose after the home-improvement retailer reported fourth-quarter earnings that beat Wall Street's estimates, and hiked its quarterly dividend by 21 percent. It also offered Shares of Macy's rose after the department-store chain reported an increase in fourth-quarter profit.
"The story for the morning, at least in the large cap space, is Home Depot, which is having the biggest impact on the S&P, which is somewhat weighed down by some of the energy names, and Apple," said Greenhaus, who believes equities are likely to trade flat overall in the near term.
(Read more: Can bulls push S&P into record territory?)
The S&P/Case Shiller composite index of 20 metro areas gained 0.8 percent on a seasonally adjusted basis.
"Home prices across the country are now nearly 25 percent off their early 2012 lows but remain nearly 20 percent off the peak from summer 2006," noted Greenhaus.
After rising 47 points and falling 59, the Dow Jones Industrial Average shed 27.48 points, or 0.2 percent, to 16,179.66, with Boeing leading blue-chip losses and Home Depot leading gains.
The lost 2.49 points, or 0.1 percent, to 1,845.12, with financials and telecommunications hardest hit and consumer discretionary and consumer staples faring best among its 10 major sectors.
The Nasdaq fell 5.38 points, or 0.1 percent, to 4,287.58.
For every seven stocks that rose, roughly eight fell on the New York Stock Exchange, where 647 million shares traded. Composite volume neared 3.5 billion.
On Tuesday, prominent bitcoin exchange Mt.Gox said it had decided to "close all transactions for the time being," with the move coming after the website halted transactions earlier this month after Mt.Gox detected what it called "unusual activity."
On Monday, stocks rallied as investors embraced M&A activity and continued to disregard lackluster data as largely due to the winter weather.
—By CNBC's Kate Gibson
Coming Up This Week:
Earnings: Target, J.C. Penney, TJX, AB InBev, Abercrombie and Fitch, AES, Barnes and Noble, Cablevision, Chesapeake Energy, Dollar Tree, Eaton Vance, Joy Global, Embraer, Caesar's Entertainment, Noodles and Co., Newfield Exploration, Royal Bank of Canada, Continental Resources, Vale, L Brands
10:00 a.m.: New home sales
11:30 p.m.: $12 billion 2-year floating-rate note auction
12:00 p.m.: Boston Fed President Eric Rosengren
1:00 p.m.: $35 billion 5-year note
7:30 p.m.: Cleveland Fed President Sandra Pianalto
Earnings: Gap, Best Buy, Kohl's, United Health Services, Chico's FAS, Monster Beverage, Decker's Outdoor, Luxottica Group, Mylan Labs, Ocwen, Wendy's, Rowan Cos, Leap Wireless, Fortress Investment, Mentor Graphics, KBR, Telefonica, Windstream, MBIA, Salesforce.com, Ross Stores, Sotheby's, Southwestern Energy, Sprouts Farmers Market
8:30 a.m.: Weekly jobless claims
8:30 a.m.: Durable goods
10:00 a.m.: Fed Chair Janet Yellen testifies before Senate Banking Committee
1:00 p.m.: $29 billion 7-year note auction
3:15 p.m.: Atlanta Fed President Dennis Lockhart
3:15 p.m.: Kansas City Fed President Esther George
Earnings: Liberty Media, Iron Mountain, 3-D Systems, NRG Energy, Seadrill
8:30 a.m.: Real GDP (Q4 advance)
9:45 a.m.: Chicago PMI
9:55 a.m.: Consumer sentiment
10:00 a.m.: Pending home sales
=3:15 p.m.: Fed Gov. Jerome Stein and Minneapolis Fed President Narayana Kocherlakota on a panel
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