Stocks tread water with little news to sway them

NEW YORK -- Wall Street stocks were little changed Tuesday, as they looked to bounce back and extend its recent two-month rally. Investors shifted into defensive corners of the market, driving up shares of drugmakers like Pfizer and foodmakers such as Archer Daniels Midland, which tend to hold up better in economic downturns.

The sideways moves come as some traders worry that the economic recovery won't be as brisk as hoped when stocks were carving steep gains over the past eight weeks.

With little news to excite investors, the financial stocks that pounded the market to 12-year lows in March and then led the bounce higher fell for a second day. Even after their slide Monday, bank shares have roughly doubled since early March, as measured by the KBW Bank Index. The sudden jump has some analysts saying those stocks are overdue for more declines.

Retailers fell ahead of a government report on retail sales due out Wednesday and in advance of quarterly results coming out from Macy's on Wednesday and Wal-Mart Stores on Thursday.

Consumer spending accounts for more than two-thirds of U.S. economic activity so investors will be eager for forecasts from retailers for insight into whether the economy is stabilizing as many traders have been betting.

Analysts said a break in the market's ascent had been overdue after the Standard & Poor's 500 index jumped more than 35% since early March. The run came as economic and corporate reports signaled the economy could be stabilizing, though in many cases not improving.

"We need to see not just the promise of recovery, but actual data," said Uri Landesman, head of global growth strategies at ING Investment Management. "The worst of the bear market is certainly behind us, but it doesn't mean it's going to be straight up."

The market retreated Monday after four banks announced plans to raise capital by selling common stock. Investors were nervous about the added shares in the market even as it was a welcome sign to see banks turn to Wall Street to raise money instead of relying on government bailouts. The extra supply of shares in circulation could push prices lower.