U.S. stocks fell Tuesday after solid reports on auto sales and factory activity failed to lift them above multi-year highs reached in the previous session. Traders were waiting for news about the Federal Reserve's plans to nurture economic growth.
The Dow fell 54 points to 13,210 at noon EDT. The Standard & Poor's 500 fell 6 to 1,412. The Nasdaq composite index fell 7 to 3,112.
The S&P 500 ended Monday at 1,419, its highest close since May 19, 2008. The Dow closed at 13,264, its highest since the last day of 2007.
Monday's rally followed a strong survey of manufacturing executives by the Institute for Supply Management, a trade group. The government's final factory orders report on Tuesday failed to ignite the same enthusiasm.
Orders to factories bounced back by a solid 1.3 percent in February as businesses made more long-term investments, the Commerce Department said after the market opened.
Orders for long-lasting factory goods had fallen steeply in January after a key tax credit expired. A preliminary report released last week showed that demand has come back for the big-ticket items, known as durable goods. Economists expect businesses will continue to invest as more of them emerge from the trenches of the recession.
The news bolstered earlier signals that U.S. consumers are feeling confident enough in the economy to buy higher-cost items like cars after years of putting off major purchases.
Consumer discretionary companies gained, one of only two rising industry group among the 10 that make up the S&P 500 index.
Chrysler said earlier that sales of its vehicles spiked by one-third last month, making March its best month in four years. Sales were helped by the introduction of small cars from the company's Fiat brand.
Ford chimed in later with a 5 percent sales increase, also helped by strong demand for its smaller models. General Motors reported a 12 percent sales gain.
The U.S. indexes had opened lower because of worries about Europe's shaky finances and uncertainty about the Federal Reserve's plans to foster economic growth.
The Fed will release minutes from the March 13 meeting of its Federal Open Market Committee at 2 p.m. Tuesday. The minutes will inform bond traders who have doubted the central bank's resolve in keeping interest rates near zero into 2014.
Concerns about Europe's debt woes and speculation about the Fed kept demand strong for ultra-safe Treasurys. The yield on the 10-year Treasury note fell to 2.16 percent from 2.19 percent late Monday.
Trading volumes have been light for about two weeks in part because there has been relatively little news to move markets. Many companies are quiet ahead of earnings season, which begins in earnest next week.
The government will release its March jobs report on Friday. Economists expect that hiring slowed modestly last month after three of the best months for the labor market since the recession. The report's impact on the market might be muted because markets will be closed for the beginning of Easter weekend.
In corporate news:
-- Molson Coors Brewing Co. fell 3 percent after the company made a major investment overseas, putting up more than $3.5 billion to snap up StarBev and its nine breweries in central and eastern Europe.
The brewer lost ground in the U.S. as the recession ravaged its customers, but it had a big quarter to end the year. It hopes to repeat that success in Europe, riding into the market while the economy are slow then riding the rebound as Europe recovers. It announced the StarBev deal the day after the European Union said that unemployment has reached the highest point since the euro was introduced in 1999.
-- Investment bank Morgan Stanley fell 2 percent after the Federal Reserve said a mortgage division had abused consumers in the foreclosure process. Morgan Stanley has since sold the division, Saxon Mortgage Services Inc., to Ocwen Financial Corp.
-- Home products retailer Conn's Inc. surged 16 percent after it beat analysts' profit forecasts in the fourth quarter and boosted its earnings guidance for the upcoming year.
-- Express Scripts Inc. gained another 3 percent a day after completing its $29.1 billion acquisition of Medco Health Solutions, forming the largest pharmacy benefits manager in the country. The stock is up 5 percent this week.
Daniel Wagner can be reached at www.twitter.com/wagnerreports.