The S&P snapped a three-day winning streak on Tuesday after mixed earnings reports and a fall in consumer confidence, but analysts said U.S. stocks were taking a breather and the rally could pick back up.
Solid earnings from Dow component DuPont
I still have a favorable view of the market, but I think the extreme move in the last few days warrants some consolidation or pullback, said Nick Kalivas, senior equity index analyst at MF Global in Chicago.
The S&P closed a hair below its 200-day moving average after crossing above it on Monday. While the failure to hold above the level was a potentially bearish signal, the fact that it ended so close to the level made it less negative.
The index's 14-day moving average line crossed over its 50-day moving average, creating a so-called golden cross that indicates positive short-term momentum.
Economic data was mixed. Home prices rose in May, but labor-market worries took July consumer confidence to its lowest since February.
The Dow Jones industrial average <.DJI> added 12.26 points, or 0.12 percent, to 10,537.69. The Standard & Poor's 500 Index <.SPX> dipped 1.17 points, or 0.10 percent, to 1,113.84. The Nasdaq Composite Index <.IXIC> shed 8.18 points, or 0.36 percent, to close at 2,288.25.
DuPont provided the biggest boost to the Dow after the company raised its forecast for 2010 earnings well above expectations, while Cummins also raised its full-year forecast. DuPont surged 3.6 percent to $40.38, and Cummins gained 2 percent to $79.43.
But steelmakers gave a less rosy picture, with AK Steel saying it was cutting production capacity to match weak demand. while U.S. Steel reported a net loss that missed Wall Street's expectations.
AK Steel lost 4.7 percent to $14.49 and U.S. Steel gave up 6.4 percent at $45.76. An S&P materials sector index <.GSPM> slipped 0.6 percent.
Consumer discretionary shares led the way down, with a sector index <.GSPD> losing 1.2 percent following the consumer confidence report.
Consumer confidence fell in July to its lowest point since February, hurt by worries about the job market, according to a report from the Conference Board, a private research group.
The Nasdaq fared the worst as shares of commercial truck manufacturer Paccar Inc PCAR.O> fell 2.9 percent to $45.62 after it lowered its estimate for 2010 industry-wide sales in the United States and Canada.
About 8.43 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, short of last year's estimated daily average of 9.65 billion.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of 17 to 13, while on the Nasdaq, 15 stocks fell for every 11 that rose.
(Editing by Jan Paschal)