Market flat, low volume could presage pullback
U.S. stocks were little changed on Monday as another day of persistently below-average volume suggested investors weren't willing to chase gains that carried stocks to 2 1/2-year highs last week.
Equities were coming off two straight weeks of gains, although light trading volume undercut the bullish sentiment.
We've been setting new highs on low volume, which suggests the rally is on thin ice, said Tom Mangan, a portfolio manager who helps oversee $2.4 billion at James Investment Research Inc in Xenia, Ohio. He said a correction was likely.
President Barack Obama proposed a federal budget that would cut the U.S. deficit by $1.1 trillion over the next 10 years. Congress must approve the plan, and Republicans, who are in the majority in the House, said it did not curb spending enough.
A (market) correction could come on negotiations over the budget if there's a fear of a government shutdown, Mangan said.
The S&P 500 has gained nearly 13 percent since the start of December, helped by strong corporate results and the recent resignation of Egyptian President Hosni Mubarak, which eased some of the tensions around the region for now.
Some traders said they still see residual strength in the market, with investors willing to buy on any decrease in prices.
The 'buy the dip' mentality is certainly the trend that we've seen over the last couple of weeks, said Ryan Larson, head of equity trading at RBC Global Asset Management in Chicago. We will probably look for that to carry through.
The Dow Jones industrial average <.DJI> was down 33.45 points, or 0.27 percent, at 12,239.81. The Standard & Poor's 500 Index <.SPX> was down 1.67 points, or 0.13 percent, at 1,327.48. The Nasdaq Composite Index <.IXIC> was up 2.90 points, or 0.10 percent, at 2,812.34.
Wal-Mart Stores Inc
China's trade surplus fell to its lowest level in nine months in January as imports surged, helping to lift Asian markets and sending European commodity stocks higher.
The data also boosted North American natural resource shares. Freeport McMoRan Copper & Gold Inc
New deals continued a string of recent merger and acquisition activity. EchoStar Corp
Shares of Hughes fell 3.8 percent to $59.43 while EchoStar shares edged 0.3 percent higher to $29.97. Emergency Medical fell almost 11 percent to $62.93.
General Electric Co
(Editing by Kenneth Barry)
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