The Dow erased all but a few points of its gain Tuesday as tech stocks retreated.
Stocks had opened higher, buoyed by optimism that a Greek bailout was coming and as techs pushed higher on some encouraging outlooks.
The market had dipped earlier after a Fed president suggested the central bank should begin tightening "sooner rather than later."
The month has started well for the market: After Monday's close, the S&P 500 and Nasdaq were already in positive territory for the year — the first time since late January. The Dow bobbed in and out of positive territory today but wasn't able to hold it through the close.
It was a struggle but the Dow Jones Industrial Average ended up 2.19 points, less than a tenth of a percent, at 10,405.98. The S&P 500gained 0.2 percent and the Nasdaq advanced 0.3 percent.
At the bottom of the Dow pack were Microsoft, Bank of America and Intel .
At the top were Disney, Verizon and Chevron.
Traders said they think it was simply fatigue and some profit-taking, as the market had started March strong and had a pretty good run in the past month.
This week's parade of Fed speakers began this morning with Kansas City Federal Reserve Bank President Thomas Hoenig speaking on CNBC's "Squawk On The Street."
"I think we shouldn't be guaranteeing the markets a zero rate for an extended period," Hoeing said. "I think the crisis of a year ago has passed. We're in recovery. We can't predict the future and therefore we should not be giving guarantees. I think it'll help the market actually adjust if they know that rates can't be at zero forever — and shouldn't be."
"I think [rates] could be higher and the effects would be very minor if you could do it gradually," Hoenig explained. "I think we should start that process sooner rather than later."
Still to come: Boston Fed President Rosengren is speaking at 1pm and Minneapolis Fed President Narayana Kocherlakota is speaking at 2 pm. Rosengren is also a voting member; Kocherlakota is an alternate.
The big economic event this week is the February jobs report, due out on Friday.
Right now, economists expect to see 50,000 jobs were dropped from nonfarm payrolls last month and that the unemployment rate ticked up to 9.8 percent. But White House economic advisor Larry Summers cautioned that recent winter storms in the Northeast are likely to distort the numbers.
”In past blizzards, those statistics have been distorted by 100,000 to 200,000 jobs,” Summers said on "Fast Money" yesterday.
A lot to watch in the U.S. today but the big one is auto sales. The market will be watching both for the spillover effects of Toyota's recall problems and how bad weather in the Northeast may have affected sales.
GM kicked it off, reporting its U.S. auto sales rose 11.5 percent in February, about half of what analysts had expected. The results came as GM announced a recall of 1.3 million compact cars in the U.S. and Canada. The company is repairing power steering motors that may fail and make steering more difficult.
Ford reported its U.S. sales jumped 43 percent last month, much higher than the 30.1 percent expected, and the first time the company has outsold GM in nearly 12 years. Its shares rose about 1 percent.
Toyota reported its sales fell 8.7 percent, not as bad as the 10-to-15-percent drop expected.
Toyota's North American President Yoshimi Inaba is testifying before the Senate Commerce Committee to update lawmakers on the company's recall fixes and its operational changes to prevent such problems from recurring.
Toyota is also reportedly planning an aggressive incentive program: Zero percent financing for 60 months — that's five years — on 2010 models.
In earnings, Staples reported a profit that missed Wall Street expectations even though revenue was better than expected.
The economic calendar was light but one report to note: A survey of U.S. business leaders showed many believe the recession won't end 2011 or later.
Qualcomm rose about 7 percent after the company, which makes chips for phones and other gadgets, raised its quarterly dividend to 19 cents per share from 17 cents, and launched a $3 billion share-buyback program.
UBS raised its 2010 revenue projection for the semiconductor industry to 18 percent from 12 percent but slashed its 2011 forecast to 5 percent from 7 percent and downgraded its rating on the sector to "neutral" from "positive," citing a supply risk.
Among individual stocks, UBS raised its rating on SanDisk but cut its rating on Micron Technology .
UBS also raised its rating on Dell, to "buy" from "neutral," citing valuation. A Dell executive said the computer maker will be looking for acquisitions to bolster its consumer, small and medium business unit.
This came after Google on Monday announced that it has bought photo-editing site Picnick, its eighth acquisition of a small company since September.
Walt Disney and Cablevision are involved in a fee dispute that could result in New York's WABC-TV disappearing for Cablevision viewers this weekend, a crucial weekend as ABC is carrying the Oscars.
More M&A activity to report: CF Industries raised its offer for Terra Industries to $47.70 per share for the fertilizer company. Terra shares leaped while CF fell.
And Dow Chemical has agreed to sell its Styron plastics unit to Bain Capital Partners for $1.63 billion.
Analysts see the year as an active one for mergers and acquisitionsafter a moribund 2009.
About 8.41 billion shares changed hands on the three major exchanges, more than recent sessions but still less than the 9.65 daily average last year. Advancers outpaced decliners, roughly 5 to 2.
Still to Come:
WEDNESDAY: Weekly mortgage applications; Challenger, ADP jobs reports; Fed's Fisher, Lockhart speak; ISM services; weekly crude inventories; Fed's beige book; earnings from BJ's and Costco
THURSDAY: Citi's Pandit testifies at COP hearing; retailers report chain-store sales; BOE, ECB rate decisions; weekly jobless claims; pending-home sales; factory orders; Fed's Bullard, Evans speak; Earnings from Anheuser-Busch and Marvell Tech
FRIDAY: February jobs report; consumer credit
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