Stocks struggled back to level ground after investors shrugged off a slew of bad news from technology companies, real estate and banks.
Major indexes were near breakeven as noon approached, a further sign that Wall Street has largely baked bad news into current trading levels and was ready to move beyond many of the familiar problems dogging stocks for the past eight months.
"We're clearly going through a bottoming phase," said Stephen Porpora, of William O'Neill. "We still have some nagging problems like the dollar, commodity prices, oil prices, the financial crisis seems to be coming out. So I say wade in carefully, but the tone of the market is quite good."
American Express and Wal-Mart led Dow components as the blue-chip index neared level ground. Mining stocks were among the hot sectors as commodity prices continued a renewed run, while health insurers like WellSpring posted strong gains after Medicare increased its reimbursement formula and delayed a decision on the way it pays for billing certain clients.
Also on the plus side, weight-management company NutriSystems saw its shares surge after the company said earnings would be better than expected amid a transitioning into a new CEO.
Novellus Systems led the S&P losers after it warned that its first-quarter earnings would be lower than expectedand its revenue would be at the low end of its forecast range.
Washington Mutual shares also slumped after the bank said it will receive a $7 billion capital injection from private equity firm TPG and other investors.
Loan securitizer First Marblehead saw its shares tumble after the company said it was looking for a new guarantor because one of its partners filed for bankruptcy.
In other banking news, Merrill Lynch, which so far has written down $24 billion in investment related to the U.S. mortgage market, does not plan to raise further capital as it has already raised more than it has lost, Chief Executive John Thain said on Tuesday.
The bank also said it was expecting a $1 billion first-quarter loss and lowered its dividend, sending the message to investors that the banking crisis had not yet passed.
And Bear Stearns front-office employees, including bankers and traders, are expected to find out their employment status on or near April 15, CNBC has learned, while their back-office colleagues will be informed about a week later.
In technology, the outlook for Advanced Micro Devices employees is also bleak, as the company said Monday it will cut 10 percent of its work force and gave a first-quarter revenue estimate below Wall Street expectations.
Also in tech, Dell shares slipped, even though CEO Alan Dell said he is optimistic about the company's chances to grow sales and profits this year.
In economic news, pending home sales numbers for Februarywere down by a greater-than-expected 1.9 percent, but the news did little to affect the broader, which have mostly priced in the housing slump. However, home builders, including Lennar, were among the biggest losers on the S&P.