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New York - US stocks ended flat on Tuesday after fluctuating between small gains and losses in a light-volume session, as investors took a breather following a 5% rally last week.
The S&P 500 turned positive for the year on Friday, with improving economic data boosting equities. Gains were amplified by better-than-expected data on consumer confidence, which hit an eight-month high in December, as Americans grew more upbeat about the labour market and their financial situations.
But after a strong rally and with trading volume light, investors were reluctant to draw many conclusions from the move.
"This is a tough week to trade on technicals or fundamentals mostly because the larger players are off the desk," said Joseph Cusick, senior market analyst at OptionsXpress Holdings in Chicago.
About 3.59 billion shares exchanged hands on the New York Stock Exchange, NYSE Amex and Nasdaq, sharply below the year's daily average of about 7.9 billion shares.
One of the day's few big movers was Sears Holdings Corp. Sears' stock plummeted 27.2% to end at $33.38 after falling to a new 52-week low of $33.26. The retailer said it plans to close 100 to 120 Kmart and Sears stores and said fourth-quarter earnings would fall by more than half from a year ago.
The outlook from Sears dragged on other retailers. JC Penney shares fell 1.1% to $35.29. Sears' travails also hit shares of Whirlpool, which last year got 8% of its sales through the retailer. Whirlpool shares fell 8.9% to $46.62.
The Dow Jones industrial average dipped 2.65 points, to 12 291.35 at the close. But the Standard & Poor's 500 Index inched up 0.10 of a point, to close at 1 265.43. The Nasdaq Composite Index added 6.56 points, to end at 2 625.20.
For the year, the Dow is up 6.2% and the Nasdaq is down 1%. The S&P's performance is turning out to be the flattest in more than 40 years. The index is up less than 1%, its smallest move in either direction since 1970.
Doug Roberts, chief investment strategist at Channel Capital Research.com in Shrewsbury, New Jersey, said stocks were likely to drift higher into the end of the year even if gains were slight.
"We'll probably have a slight drift upwards, but there's not a lot of volume," he said. "In the absence of any bad news, we could see a drift up over the next four days."
Entertainment companies' shares also fell. Regal Entertainment Group fell 3.6% to $11.89 and Carmike Cinemas lost 0.9% to $7.03.
The CBOE Volatility Index, or VIX, Wall Street's fear gauge, shot up 5.7% to 21.91. But traders said the gains were mostly technical due to adjustments in positions ahead of the three-day holiday.
"Now that we are back, market makers are raising volatility, putting premiums into the VIX cash. January futures are in at around $25.50. We are seeing the holiday effect," said Jamie Tyrrell at Group 1 Trading in Chicago.
US single-family home prices fell slightly more than expected in October, according to S&P/Case-Shiller data, coming after better-than-expected data on the sector last week.
