Stocks pared their losses Tuesday after a report showed consumer confidence rose to its highest level since September 2008.
Stocks had opened lower amid jitters about the Federal Reserve's two-day policy meeting and testimony by Goldman Sachs executives on Capitol Hill.
The Dow pushed briefly into positive territory, led by 3M, ExxonMobil and Merck, but quickly slipped below yesterday's close. The S&P 500 and Nasdaq remained lower.
The CBOE volatility index, widely considered the best gauge of fear in the market, rose above 18.
Stocks ended largely flat in the previous session, but any insight into the Fed's strategy for interest rates could shift momentum throughout the week.
"I tend to think that they will keep a relatively easy monetary stance," Mark Fuchs, CEO of Fuchs Capital Partners, told CNBC Tuesday.
"Given that jobs are a major top of mind for the Fed, I don't see them actually raising rates any time certainly for this year," Fuchs added.
A gauge of consumer confidence jumped to 57.9 in April, the highest since just before teh financial crisis in September 2008, from 52.3 in March, according to a report from the Conference Report.
Earlier, a report showed home prices fell 0.9 percent in February from the previous month but were up year-over-year for the first time since December 2006.
Goldman Sachs will take center stage today as CEO Lloyd Blankfein and the trader at the center of the fraud case, Fabrice Tourre, testify before a Senate panel. The hearing kicked off around 10am ET.
Prepared testimony suggests Blankfein will tell the panel that Goldman "certainly did not bet against our clients"and that Tourre will"categorically" deny the SEC charges.
There was also the uncertainty of Greece hanging over the market as the nation's borrowing costs shot up to a 12-year high, sparking worries that any help might come too late, along with a fresh round of worries about Spain and Portugal.
"The recent problems faced by Greece are only the tip of a sovereign-debt icebergin many advanced economies,” Nouriel Roubini, the economist nicknamed "Dr. Doom," wrote on his Web site RGE Monitor.
Meanwhile, the Fed will kick off its rate-setting meeting with the latest decision and statement due Wednesday afternoon.
Also in Washington, negotiations will undoubtedly be taking place behind closed doors, after a Senate vote to begin debate on the proposed financial regulation reform bill failed by three votes.
Ford earnings beat expectations but sales disappointed.
DuPont reported its profit doubled and raised its forecast, while 3Mbeat on both earnings and its outlook.
DuPont shares fell, while 3M was the biggest gainer on the Dow.
After the bell on Monday, Texas Instruments exceeded expectations and boosted its revenue guidance but its shares skidded this morning.
US Steel reported a smaller than expected loss and said it expects to return to profitability in the second quarter.
UPS reported sharply higher earnings and backed its outlook, after pre-announcing a week or so ago.
European stocks were lower, ending a two-session rally, as banking stocks declined. Asian stocks ended lower with the Shanghai Composite Index finding its lowest close in six-and-a-half months.
TUESDAY: 3G iPads to ship; Goldman execs. testify before Senate; two-day Fed meeting begins; Earnings from Broadcom after the bell
WEDNESDAY: GE and BofA shareholder meetings; Weekly mortgage applications; Weekly crude inventories; Fed announcement (2:15 PM ET); Earnings from Comcast, ConocoPhillips, Corning, Sprint, Visa
THURSDAY: Weekly jobless claims; Earnings from ExxonMobil, P&G, Aetna, Bristol-Myers Squibb, Burger King, Kellogg, Motorola, Time Warner Cable, Viacom
FRIDAY: Berkshire Hathaway annual meeting; AT&T shareholder meetings; GDP; consumer sentiment; Earnings from Chevron
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