Wall Street edged higher on Tuesday as China's trade surplus eased fears about a slowdown in global economic growth and Microsoft said it would pay $8.5 billion in cash for Internet phone service Skype.
But investors shifted into more defensive positions in a sign the recovery was not accelerating as quickly as anticipated. The leading gainer among S&P 500 sectors was utilities.
Overall, it looks like that market wants to go higher, but I don't see the upside above 1,370, said Stifel Nicolaus options market strategist Elliot Spar.
There are a lot of sectors that are looking tired.
The Dow Jones industrial average <.DJI> was up 45.94 points, or 0.36 percent, at 12,730.62. The Standard & Poor's 500 Index <.SPX> was up 5.87 points, or 0.44 percent, at 1,352.16. The Nasdaq Composite Index <.IXIC> was up 12.93 points, or 0.45 percent, at 2,856.18.
The S&P was off 1.4 percent from its recent intraday high on May 2, which was the highest since early June 2008.
The utilities sector <.GSPU> rose 1.4 percent.
Burt White, chief investment officer at LPL Financial in Boston, said the market was relocating its growth expectations and a reallocation of assets is in the works.
We're in a new position in this business cycle, White said, pointing to a shift out of oil, basic materials and technology, and more toward companies with stable growth such as utilities.
Microsoft shares were down 1.2 percent at $25.53 but shares of eBay Inc
China, the world's second-largest economy, posted an $11.4 billion trade surplus in April, nearly four times greater than expected, after exports hit a record on healthy demand and imports rose less than forecast.
China's export numbers were very good, said LPL's White. That gave a shot in the arm to this market.
Boston Scientific Corp
Dean Foods Co
Investors awaited results from Dow component Walt Disney Co
(Reporting by Angela Moon, Editing by Kenneth Barry)