Investors stayed cautious on Wednesday after a rally, leaving stocks little changed despite solid reports on new home sales and durable goods orders.
For the third consecutive day, equities bounced after favorable news, but the gains fizzled.
After a five-month run-up that has pushed the broader S&P 500 up 52 percent from its 12-year closing low on March 9, analysts have been questioning the rally's strength even as economic data points to improved demand.
It's a sleepy day on Wall Street, said Fred Dickson, market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.
It seems like traders have lost the momentum after a huge upward move and they are finally taking a breather.
The Dow Jones industrial average <.DJI> rose 4.23 points, or 0.04 percent, at 9,543.52. The Standard & Poor's 500 Index <.SPX> added just 0.12 of a point, or 0.01 percent, to 1,028.12. The Nasdaq Composite Index <.IXIC> ended up just 0.20 points, or 0.01 percent, at 2,024.43.
In July, sales of new homes rose at their fastest pace in 10 months, the U.S. Commerce Department's data showed, but the impact on the broader market was muted as some market players said it has already been factored in.
But the data proved bullish for the housing sector, driving the Dow Jones U.S. Home Construction index <.DJUSHB> up 3 percent.
Among the index components, D.R. Horton Inc
Home Depot Inc
Durable goods excluding transportation rose 0.8 percent, below expectations, although overall durable goods orders posted the largest jump since July 2007, a separate Commerce Department report showed.
Industrial stocks tumbled, in part after China said it would take steps to curb overcapacity among steel and cement producers.
The Dow Jones Heavy Construction index <.DJUSHV> fell 1.8 percent, with Jacobs Engineering
One of the top drags on the Nasdaq was Apple Inc
In earnings-related activity, Williams-Sonoma
Topping the Nasdaq's list of biggest percentage decliners was the stock of Concurrent Computer
Volume was light on the New York Stock Exchange, with only 1.02 billion shares changing hands, below last year's estimated daily average of 1.49 billion. On the Nasdaq, about 2.09 billion shares traded, also lower than last year's daily average of 2.28 billion.
Declining stocks slightly outnumbered advancing ones on the NYSE by a ratio of about 8 to 7. On the Nasdaq, though, the opposite trend prevailed: Advancing stocks outnumbered declining ones by a ratio of about 14 to 13.
(Editing by Jan Paschal)