U.S. stocks were little changed on Tuesday as outlooks from Target and Home Depot sparked caution about holiday spending, offsetting upbeat broker views on Microsoft and Exxon Mobil .

Investors were generally reluctant to bid stocks higher, a day after key indexes soared to fresh 13-month highs and the benchmark S&P 500 <.SPX> hit a major technical milestone, closing above the psychologically important 1,100 level.

Weak outlooks for the key holiday season weigh on investor psychology since consumer spending accounts for about two-thirds of U.S. economic activity.

It feels more like a pause to refresh than the beginning of a downturn, said Eric Kuby, chief investment officer at NorthStar Investment Management Corp in Chicago.

The news from retailers wasn't particularly good. It seems to me the major flavor for today is once again, the market participants questioning the strength of the recovery.

The Dow Jones industrial average <.DJI> gained 12.85 points, or 0.12 percent, to 10,419.81. The Standard & Poor's 500 Index <.SPX> shed 1.17 points, or 0.11 percent, to 1,108.13. The Nasdaq Composite Index <.IXIC> rose 1.92 points, or 0.09 percent, to 2,199.73.

Home Depot, the leading U.S. home improvement chain, reported quarterly results that beat analysts' estimates, but its outlook suggested weaker results at the end of the year and it predicted no meaningful recovery until the second half of 2010.

The stock, a Dow component, was off 3 percent at $26.83.

Target Corp , the No. 2 U.S. discounter, forecast a holiday quarterly profit that could fall short of Wall Street's estimates, saying early November results showed tepid consumer demand.

The stock dropped 2.9 percent to $48.81, while the S&P consumer discretionaries index <.GSPD> shed 1 percent.

Data showing that U.S. industrial output rose less than expected in October was another headwind, overshadowing news that the Producer Price Index, a gauge of wholesale inflation, was tame last month.

Even so, shares of software maker Microsoft Corp

gained 2 percent to $29.99 after Morgan Stanley raised its price target on the stock and said it was upbeat on the prospects for Windows 7 and on the company's holiday season.

Shares of Exxon Mobil rose 0.6 percent to $74.86 after Barclays raised its recommendation on the stock to overweight from equal-weight.

Monday's strong run-up extended the broader market's recovery since the S&P 500's 12-year closing low of early March. That benchmark index is up 63.5 percent since then.

(Editing by Jan Paschal)