NEW YORK (AP) -- A record-breaking rally in stocks stalled Monday as investors assessed whether stock valuations were overstating the improvement in the economy.
The latest positive data, out Monday, showed that Americans increased spending at retailers last month. That suggests that consumers may boost economic growth in the current quarter ending June 30. Still, that wasn't enough to lift shares.
"What we have seen is a huge rally, and there aren't any stones unturned at this point," said Alec Young, global equity strategist at S&P Capital IQ. "You reach a point where investors aren't willing to bid things up any more."
Stocks have surged this year, boosted by an improving economy, Federal Reserve stimulus and record corporate earnings. Signs that the housing market is reviving are also supporting stocks. The Dow Jones industrial average and the Standard and Poor's 500 index both closed at record highs Friday.
Retail sales increased 0.1 percent in April from March, the Commerce Department said Monday. That's an improvement from the 0.5 percent decline in March, which was the largest drop in nine months. Economists had forecast that sales decline by 0.3 percent.
Consumer sentiment is improving as the housing market recovers, which is giving people the confidence to spend more, said Doug Cote, chief market strategist at ING Investment Management.
"If housing continues its upward trajectory, the animal spirits of the consumer will continue to be bolstered," said Cote.
On Monday, stocks were mixed by mid-afternoon, after starting the day lower.
The Dow fell 31 points, or 0.2 percent, to 15,087, as of 2:46 p.m. Eastern time. The S&P 500 index was little changed at 1,633.10. The Dow is up 15.1 percent this year, and the S&P 500 is 14.6 percent higher.
Companies in the materials industry dropped the most of any industry group in the S&P 500, dropping 0.8 percent. Health care companies advanced the most, rising 0.6 percent.
More than 90 percent of companies in the S&P 500 have reported earnings for the first quarter, and corporate earnings are projected to grow by an average of 5 percent for the period, according to data from S&P Capital IQ. While earnings growth has slowed from the previous quarter, it is forecast to end the year at 11.6 percent.
Among stocks making big moves:
— Yum Brands fell $1.47, or 2.1 percent, to $68.91 after the owner of Kentucky Fried Chicken reported that sales in China fell 29 percent last month, driven by concerns about Avian flu.
— Theravance, a biopharmaceutical company, surged $5.42, or 16 percent, to $40.36. Irish drugmaker Elan Corp. plans to pay $1 billion for the right to future royalties from respiratory treatments being developed by Theravance and GlaxoSmithKline.
— Autozone, a retailer of spare parts for cars, fell $4.73, or 1.1 percent, to $416.30 after Deutsche Bank cut its recommendation on the stock from "buy" to "hold" because gains for the company's stock this year already reflect its growth potential. The retailer's stock is up 17.3 percent so far this year.
In commodities trading, oil fell $1.03, or 1.06 percent, to $95.02 a barrel. Gold dropped $4, or 4.6 percent, to $1,432 an ounce. The U.S. dollar rose against the Japanese yen at 101.93.
In government bond trading, the yield on the 10-year Treasury note rose to 1.92 percent from 1.90 percent. The yield has jumped this month as investors sold Treasurys and moved into riskier assets.
The Nasdaq composite rose 3 points, 0.1 percent, to 3,438.