U.S. stocks closed down in light volume trade for the first time in three sessions as developments in Ukraine and Russia continued to trouble investors.
Consolidated tape volume on the New York Stock Exchange was 2.57 billion, below the average 3.1 billion and the lowest since July 3.
There's not enough traders around to drive markets one way or another, said Kim Forrest, senior equity analyst at Fort Pitt Capital. "I think we need real news [like] mergers and acquisitions."
Retail sales and earnings from major consumer companies expected later this week are important, but won't move markets much, analysts said.
On the geopolitical front, investors are "waiting for some kind of resolution," said Randy Warren, chief investment officer of Warren Financial Service.
Reuters reported on Tuesday that Russia has sent a 280 truck convoy to Ukraine carrying humanitarian aid, which the receiving country says it may block. NATO fears the aid may be a disguised bid to invade Ukraine, following its annexation of the country's Crimea region in March.
The uncertainty about Russia's intentions is affecting markets, but analysts aren't anticipating major disruptions.
"I don't think that indicates the market is about to fall apart here," said Peter Cardillo, chief market economist at Rockwell Global Capital. "I don't expect that to happen."
Stocks had traded flat after ticking higher on a positive JOLTS report and NFIB small business optimism index, offering more evidence that the economy is slowly strengthening. The Treasury Department also reported deficit decreases. No significant developments came out of the Middle East on Tuesday.
"We have concerns everywhere but the biggest concern is Russian sanctions," said Art Hogan, chief market strategist at Wunderlich Securities.
Some analysts pointed to the effect of those policies on the European economy. Germany's ZEW report showed that investor morale dropped to its lowest since December 2012, sending the DAX more than 1 percent lower and FTSEurofirst 300 about 0.20 percent lower in the European close. The Euro also declined against the dollar.
"There's no real gigantic economic information domestically, so investors will be trading off Russian influences [on Europe]," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
On Monday, U.S. President Barack Obama said Iraq had made important strides towards rebuffing of militants, through the appointment of a new prime minister. He of an "inclusive" government.
Over in the Middle East, Israel and Hamas agreed on Sunday to a new 72-hour ceasefire, proposed by Egypt. Reports on Monday suggested the peace was holding.
"Right now the market is saying that all these things are going to work out favorably," said Byron Wien, Vice Chairman of Blackstone Advisory Partners. "Well, maybe most of them will. But if one of them flares up, if the price of oil shoots up, that could create a calamity in the market. So that keeps me up a night."
Low oil prices put pressure on energy companies as stocks opened and closed lower on Tuesday for the first time in three sessions.
The Dow Jones Industrial Average closed down 9.44 points, or 0.06 percent, to 16,560.54, with United Technologies and General Electric the largest of the 16 blue-chip decliners and Microsoft leading gains.
The closed lower 3.17 points, or 0.16 percent, to 1,933.75, with energy the greatest laggard as seven of 10 sectors declined and telecommunications led gains.
The Nasdaq fell 12 points, or 0.27 percent, to 4,389.25.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, ended the day near 14.20, below the 50 period moving average of 14.33.
In the market close, three stocks declined for every two that advanced on the New York Stock Exchange, with an exchange volume of more than 542 million and a composite volume of 2.6 billion.
U.S. 10-year Treasury note yield rose to 2.45 percent ahead of its auction on Wednesday.
The U.S. dollar gained slightly against other major currencies.
On the New York Mercantile Exchange, crude futures closed 71 cents lower at $97.37 a barrel, while gold futures closed up 10 cents to $1,310.60 an ounce. Brent crude oil fell to a 13-month low in intraday trading.
Women's fashion brand Kate Spade dropped more than 19 percent to four-month lows after the firm expressed concerns on margin pressure in a conference call. Earlier in the session, the firm rose to seven-year highs on a better-than-expected quarterly earnings report.
Ahead of other reports from major consumer firms later this week, a few technology stocks remained in focus.
Nuance Communications, maker of speech recognition software, dropped more than 10 percent on Tuesday after reporting fiscal third quarter profit of 27 cents per share, excluding certain items, matching estimates. However, its revenue was below Street forecasts, as is its current quarter revenue and earnings forecast. Nuance is the company whose software powers Apple's Siri feature on iPhones and iPads.
Cloud hosting company Rackspace fell nearly 6 percent after reporting earnings in line with estimates and revenue that beat after Monday's closing bell. The company is forecasting current quarter revenue above analyst estimates, as demand for its cloud management services increases.
Tesla closed slightly higher after falling about one percent in morning trading. Its Model S sedan is the subject of a new , in which the magazine said the car has "more than its share of problems." The publication praised the car for its design and smoothness, but is now also detailing various issues with a Model S that it has driven about 16,000 miles. Tesla points out that its warranty covered the issues mentioned and that Consumer Reports benefits, as any owner would, from its comprehensive warranty program.
Twitter rose more than 2 percent in late morning trading despite a report that 8.5 percent of its active users are actually bots.
On tap this week:
7:00 a.m.: Mortgage applications
8:30 a.m.: Retail sales
0905 a.m.: New York Fed President William Dudley
9:20 a.m.: Boston Fed President Eric Rosengren
10:00 a.m.: Business inventories
1:00 p.m.: 10-year note auction
8:30 a.m.: Jobless claims
8:30 a.m.: Import prices
1:00 p.m.: 30-year bond auction
Earnings: Estee Lauder
8:30 a.m.: PPI
8:30 a.m.: Empire manufacturing survey
9:00 a.m.: TIC data
9:15 a.m.: Industrial production
9:15 a.m.: Capacity utilization
9:55 a.m.: University of Michigan consumer sentiment
—By CNBC's Evelyn Cheng. Reuters contributed to this report.
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