The stock market showed signs of stability Tuesday as major indexes held on to most of their rebound from last week's big drop.
The Dow Jones industrial average fell about 37 points after fluctuating for much of the day. Broader indicators were mixed.
Analysts said it was reassuring that the market kept most of its gains from Monday, when the Dow soared 405 points in response to the creation of a bailout fund for weak countries like Greece. Tuesday's trading signaled that the previous day's big move wasn't solely driven by euphoria.
"I'm very encouraged by the market action," said Keith Walter, portfolio manager of the Artio Global Equity Fund in New York. "I think today was a more important day than yesterday."
More bad news from Europe or elsewhere could always unravel the advance. Even with Monday's rise, stocks are only back to where they were about a week ago.
The easing of worries about Europe allowed traders to focus on the stronger economic picture in the U.S. The Commerce Department said wholesale inventories rose 0.4 percent in March. That was just short of economists' forecasts. But sales increased by more than double the expected amount, a sign that demand is improving.
Investors have been concerned that problems in weaker European countries would disrupt a global economic recovery.
"We've taken the panic out of the market," said Paul Zemsky, head of asset allocation at ING Investment Management in New York. "In the U.S. market the fundamentals are clearly good."
Zemsky also said last week's slide made it more likely that stocks would resume their climb. The bailout helped reassure investors that European countries would act decisively to protect the euro. However several weaker countries will still have to make deep spending cuts to rebuild confidence in the euro, which could slow a recovery in Europe's economy.
Asian markets retreated after a report showed inflation in China accelerated last month. China has already spooked markets by clamping down on bank lending to cool its economy, and investors worried that the inflation report could lead Chinese authorities to tap the brakes on its huge economy again. That could hurt U.S. and other companies that do business with China.
Global economic indicators, such as the U.S. government's monthly jobs report, have been overshadowed recently as investors feared debt problems in Greece would spread. Traders have also been concerned about how much European debt woes would hurt the euro, the currency used by 16 European countries.
The Dow fell 36.88, or 0.3 percent, to 10,748.26. The Dow dropped by as much as 100 points shortly after the opening bell and rose as much as 89 points in afternoon trading. The index has ended lower in five of the past six days.
The Standard & Poor's 500 index fell 3.94, or 0.3 percent, to 1,155.79, while the Nasdaq composite index rose 0.64, or less than 0.1 percent, to 2,375.31.
On Monday, major stock indexes recorded their biggest advance since March 2009. The Dow rose 3.9 percent, while the S&P 500 index surged 4.4 percent.
Treasury prices were little changed after plunging on Monday when investors dumped safe investments following news of the European bailout. The yield on the benchmark 10-year Treasury note, which moves opposite its price, edged down to 3.53 percent from 3.54 percent.
Crude oil fell 43 cents to $76.37 per barrel on the New York Mercantile Exchange.
The dollar rose against the euro after traders grew concerned about the fallout from the debt Europe could incur from financing the rescue plan. That uncertainty drove gold sharply higher.
Among stocks, Intel Corp. fell 27 cents, or 1.2 percent, to $22.28 after the chipmaker's CEO said that the company expects revenue and net income per share to increase by the low double digits in the news few years because of rising demand.
Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 1.5 billion shares, compared with 1.9 billion Monday.
The Russell 2000 index of smaller companies rose 5.87, or 0.9 percent, to 695.48.
Britain's FTSE 100 fell 1 percent, Germany's DAX index rose 0.3 percent, and France's CAC-40 fell 0.7 percent. Japan's Nikkei stock average fell 1.1 percent.