Investors turned cautious on the second trading day of the year as a pair of economic reports gave mixed signals about how the recovery was going.
Major stock indexes ended little changed a day after the Dow Jones industrials soared more than 150 points on upbeat manufacturing reports in the U.S. and China. Uncertainty over key reports this week on employment and the service industry also kept buyers at bay.
The economic news on Tuesday was muddled. The Commerce Department reported that factory orders rose by more than twice what had been expected in November, reflecting demand in the steel, computer and chemical industries. The gain of 1.1 percent easily beat the 0.5 percent forecast of analysts polled Thomson Reuters.
Meanwhile, the number of buyers who agreed to purchase previously occupied homes fell sharply in November, an indication that sales will fall this winter. The National Association of Realtors said its index of pending home sales fell 16 percent, the first drop after nine months of gains. Some decline had been expected as investors raced to buy homes ahead of a tax credit deadline, which was later extended.
A strengthening dollar also held stocks to modest moves. A strong dollar makes commodities and shares of the companies that produce them less attractive to foreign buyers. It also hurts the profits of companies that do business overseas.
Investors are looking for clues about the direction of the economy in 2010 after a nine-month rally pushed stocks to steep gains for 2009. Now, analysts say, further signs of strengthening in the economy are needed to help stocks hold their gains. Major stock indexes stand at 15-month highs.
The Dow industrials slipped 11.94, or 0.1 percent, to 10,572.02. The broader Standard & Poor's 500 index rose 3.53, or 0.3 percent, to 1,136.52, its highest close since Oct. 1, 2008. The Nasdaq composite index edged up 0.29, or less than 0.1 percent, to 2,308.71.
Three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume rose to 5.2 billion shares from 4.1 billion Monday.
Bond prices rose, pushing interest rates lower. The yield on the benchmark 10-year Treasury note fell to 3.76 percent from 3.83 percent late Monday.
Crude oil rose 26 cents to settle at $81.77 a barrel on the New York Mercantile Exchange.
The early days of January are when many investors, from pension funds to individuals, pump money into the markets as they set up their investment strategies for the year. Markets often rise as the new money arrives.
However Nick Kalivas, vice president of financial research at MF Global in Chicago, said investors are cautious ahead of reports on the service industry and employment later in the week because they want to confirm that economy is healing.
"There is a lot of data out the next couple of days that people want to see before they chase a market at its highs," Kalivas said.
The Institute for Supply Management will report its index of activity in the service industry on Wednesday, and on Friday the market will get the most important economic reading of the month, the Labor Department's employment report.
Ford Motor Co.'s shares jumped after the automaker said its December sales jumped 33 percent fed by demand for midsize cars like the Ford Fusion, whose sales rose 83 percent. Ford also had its first full-year gain in U.S. market share since 1995. Ford rose 68 cents, or 6.6 percent, to $10.96.
The Russell 2000 index of smaller companies fell 1.61, or 0.3 percent, to 638.49.
Britain's FTSE 100 rose 0.4 percent, Germany's DAX index fell 0.3 percent, and France's CAC-40 slipped less than 0.1 percent. Japan's Nikkei stock average rose 0.3 percent.