U.S. stocks turned mostly higher Tuesday, with the Nasdaq Composite remaining in the red, after disappointing reads on builder sentiment and manufacturing in the New York region countered upbeat earnings from Dow components Coca-Cola and Johnson & Johnson.
The Nasdaq's fall "is not overly positive as as indicator for the rest of the market, the S&P for example. The longer MasterCard, Priceline, Google, and the biotechnology names continue to plumb new lows, the more likely it is the rest of the market will follow them down," said Bruce McCain, chief investment strategist at Key Private Bank.
"Valuations got a little bit elevated given the anemic growth we've seen this year. Corrections are one way to moderate that. We look for a correction, not the start of a bear market," McCain, added.
Wall Street had started off the session higher, with the Dow climbing nearly 100 points, after Coca-Cola (NYSE:KO - News) reported first-quarter revenue that beat expectations and Johnson & Johnson (NYSE:JNJ - News) hiked its yearly outlook.
But equities fell after The Federal Reserve Bank of New York's gauge of manufacturing fell in March and the National Association of Home Builders/Wells Fargo Housing Market Index climbed to 47 in April, coming in below estimates.
"The market is trading more on technical levels as opposed to fundamentals, but ultimately the fundamentals will trump everything, as that's the environment you can project for corporate profits, and corporate profits are going to matter more this year than multiple expansion," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
After rising 99 points and falling 110, theDow Jones Industrial Average (Dow Jones Global Indexes: .DJI) was lately up 9.62 points, or 0.1 percent, at 16,182.86, with Coca-Cola (NYSE:KO - News) and Johnson & Johnson (NYSE:JNJ - News) pacing gains that included 18 of its 30 components.
"Worth watching is the 1,835 to 1,840 level on the S&P, which has now become an overhead resistance zone," noted Jeffrey Saut, chief investment strategist at Raymond James.
The Nasdaq Composite (NASDAQ:^IXIC - News) was lately off 24.98 points, or 0.6 percent, to 3,997.72, leaving it more than 9 percent off its March high of 4,371.71, just shy of the 10 percent decline that would qualify as a correction.
For every seven shares rising, eight declined on the New York Stock Exchange, where 438 million shares traded as of 2:20 p.m. Eastern; composite volume cleared 2.4 billion.
Reports of pro-Russian separatists briefly taking control of an airfield in eastern Ukraine also weighed on investor sentiment.
The tensions in Ukraine "is one more source of the tug of war between those who think the market should go up and those who can't find a reason to send it higher. Russia is a simmering pot that has the potential to boil over and at least dampen investor complacency," said McCain.
Gold prices were hammered Tuesday, with futures for June delivery down $23.90, or 1.8 percent, at $1,303.30 an ounce, after the World Gold Council said consumer demand for the metal could be limited this year.
"Gold is getting obliterated today. The council is forecasting China is not going to be increasing its demand for gold this year, so the buying of jewelry and such is not growing; otherwise I would interpret today's data as being gold friendly, as inflation was higher than consensus," said Luschini of data that had the cost of living in the U.S. rising more than estimated in March as the cost of food and rents climbed.
The dollar edged higher against other global currencies and the 10-year Treasury yield fell 3 basis points to 2.615 percent. Crude-oil futures for May delivery fell 34 cents, or 0.3 percent, to $103.71 a barrel.
On Monday, stocks rallied after data had U.S. retail sales rising the most since 2012.
-By CNBC's Kate Gibson
Coming Up This Week:
3:00 p.m.: Philadelphia Fed President Charles Plosser, panel at Atlanta Fed conference
4:00 p.m.: Boston Fed President Eric Rosengren
8:00 p.m.: Minneapolis Fed President Narayana Kocherlakota
Earnings: Google, Bank of America, IBM, American Express, PNC Financial, Capital One, Credit Suisse, US Bancorp, Huntington Bancshares, SLM, SanDisk, Steel Dynamics, Abbott Labs, St. Jude Medical, Noble, Burberry, Kansas City Southern
7:00 a.m.: Mortgage applications
8:30 a.m.: Housing starts
8:30 a.m.: Fed Gov. Jerome Stein
9:15 am Industrial production
11:30 a.m.: Atlanta Fed's Lockhart
12:25 p.m.: Fed Chair Janet Yellen at Economic Club of NY, Q&A
1:25 p.m.: Dallas Fed President Richard Fisher
2:00 p.m.: Beige book
Earnings: General Electric, BlackRock, Goldman Sachs, Morgan Stanley, Blackstone, DuPont, Union Pacific, Pepsico, Chipotle, Baker Hughes, Sherwin-Williams, Fifth Third, AutoNation, Sonoco Products, Snap-on Mattel, Cypress Semiconductor, Baxter, Taiwan Semiconductor, Rockwell Collins
8:30 a.m.: Jobless claims
10:00 a.m.: Philadelphia Fed survey
Markets closed for Good Friday
10:00 a.m.: Leading indicators
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