The S&P finished higher Tuesday as Ford shares soared after better-than-expected sales.
The Dow ended slightly lower after a report showed pending-home sales fell much more sharply than expected. The Nasdaq finished flat.
Ford shares gained 6.6 percent, topping $11 intraday for the first time since August 2005, after the auto maker reported sales shot up 23.3 percent in December, nearly three times of what economists had expected.
Investors had expected a solid gain following a report out of China earlier today that Ford's joint venture there saw sales jump nearly 55 percentin 2009 but this number seemed to even exceed those expectations.
"I think you take the [Ford] auto numbers and you contrast that with the existing-home sales and people are clearly willing to spend if they have a need or if they see a particularly good deal," Bruce McCain, chief investment strategist at Key Private Bank, said on CNBC after Ford's report. "But we see a lot of continuing caution with people still concerned about their overall income relative to where they need to spend and we think that continues going forward."
A stark reminder of the auto sector's plight: Chrysler reported its sales fell 10.5 percent in December, capping off the auto maker's worst year since 1962, and General Motors' sales fell 12.8 percent.
Auto sales will trickle out through the early afternoon. Overall, economists expect to see a seasonally adjusted annual rate of 10.9 million vehicles, which would match the November rate.
Meanwhile, pending-home sales tumbled 16 percentin November, much steeper than the 5-percent drop expected and the 3.7-percent gain logged in October. However, sales rose 15.5 percent year over year.
Economists chalked up the droff in pending-home sales to the original expiration of first-time homebuyers' tax credit but expect they'll ramp up again in the first half of 2010 as the tax credit was extended.
The morning's other data point was factory orders, which rose 1.1 percentin November, more than double of what was expected. But what economists — and the market — are waiting for is Friday's jobs report. The buzz in the market is that this could be the first report in two years to show jobs added to payrolls — and that it could be up to 40,000 jobs.
Expectations of a gain are building in the market but Joel Naroff of Naroff Economic Advisors says don't worry if it doesn't happen this Friday.
"The data are pointing to a return to payroll gains not losses and which month it occurs doesn’t matter much," Naroff wrote in a note to clients. "What the economist community is arguing about is how strong those increases will be. I worry that they will not be very robust this year."
Financials were a star performer, with Bank of America near the top of the Dow, as investors bet on the sector for the new year.
Analyst Meredith Whitney again slashed her earnings forecast for Goldman Sachs but the stock — and the sector — shrugged it off. Goldman shares gained 1.8 percent.
Energy and materials were the other top sectors as the dollar declined and oilsettled at $81.77 a barrel. Gold settled around $1,117 an ounce.
The worst sectors were utilities, health care andconsumer staples.
Kraft was at the top of the Dow's leader board after the company sold its frozen pizza business to Swiss food maker Nestle for $3.7 billion and raised its offer for Cadbury using the proceeds of that sale.Cadbury quickly rejected the new offer.
Warren Buffett's Berkshire Hathawayvoted "no" on Kraft's proposal to issue 370 million shares to help finance its purchase of Cadbury.