U.S. stocks closed mixed on Tuesday, mostly failing to hold momentum from Monday, as investors reacted to individual earnings reports of major companies.
"I think investors are conflicted with the earnings picture better on the earnings front, a little weaker on the revenue front, without hard economic data to quake them," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "We have insufficient energy to break through to new highs."
Stocks opened higher but soon pared gains. The Dow Jones industrial average briefly fell more than 100 points in afternoon trade, weighed by Travelers' miss on both the top and bottom lines, FX headwinds on DuPont's earnings and IBM's continued decline in revenue. The S&P 500 also fell into negative territory, with energy and utilities lagging.
The Nasdaq closed 0.40 percent higher to post its second consecutive day of gains. Facebook extended gains by about 1 percent ahead of its earnings report on Wednesday after the bell. The iShares Nasdaq Biotech ETF (IBB) rose nearly 2 percent.
"This kind of bifircation is extremely healthy," said Art Hogan, chief market strategist at Wunderlich Securities. "What does this tell us? People are buying stocks. They're not buying markets."
When the major averages move together, that indicates more of a risk-on or risk-off trade, Hogan said.
The major indices are little changed from their levels one month ago.
It indicates there's resistance at higher levels and "some distribution going around," said Peter Cardillo, chief market economist at Rockwell Global Capital.