Wall Street is back on the defensive.
Stocks ended mixed but well off their lows Tuesday as early concerns about a barrage of stock offerings eased and rising oil prices lifted energy stocks. The Dow Jones industrials rose 50 points, while broader indicators fell.
Investors turned to defensive corners of the market, driving up shares of drugmakers like Pfizer and food and drink producers like Coca-Cola, which tend to hold up better in economic downturns. Even strapped consumers aren't as quick to cut back on medication and food.
The fluctuations came as some traders worried that the economic recovery won't be as brisk as hoped when stocks were posting big gains over the past eight weeks. Stock offerings from companies trying to raise cash has stirred concerns about the loss in value that existing shares would incur as more shares are issued.
But the dip also brought investors looking to jump into a market that has rallied more than 30% since early March.
"You have people who missed this mammoth rally and now those people are taking the opportunity on any pullback to buy," said Jeffrey Frankel, president of Stuart Frankel & Co.
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 sliding this week, bank shares have roughly doubled since early March, as measured by the KBW Bank Index.
Investors also pulled money from technology stocks after the Nasdaq composite index closed at a six-month high last week. The slide Monday and mixed finish Tuesday makes it difficult to tell whether Wall Street might be able to restart its stalled two-month rally.
The Dow rose 50.34, or 0.6%, to 8,469.11 after falling 155 on Monday. The S&P 500 index slipped 0.89, or 0.1%, to 908.35 and the Nasdaq fell 15.32, or 0.9%, to 1,715.92.
Analysts said a break in the market's ascent had been overdue. The jump came as economic and corporate reports signaled the economy could be stabilizing.
Matt Lloyd, chief investment strategist at Advisors Asset Management, expects the rally will resume and said that a slowdown is healthy.
"We need to kind of walk at a brisk pace as opposed to sprint," he said.
The market retreated Monday after four banks announced plans to raise capital by selling common stock.
How well the market can absorb the new shares likely will be an important tests of its health, some analysts say. TrimTabs Investment Research estimates companies will introduce at least $50 billion in new stock into the market this month. That would be the highest since May 2001.
The pace of offerings could be a good sign, analysts said. Months ago, companies whose shares had been pummeled wouldn't have turned to the stock market for cash.
"Longer term, bigger picture, it is one of those underpinnings of strength," said Steve Sachs, director of trading at Rydex Investments.
Traders grew jittery Tuesday after Anadarko Petroleum's stock fell below the $45.50 offering price for a sale of 30 million shares. But the stock ended above that level, falling $2.93, or 6%, to $45.91.
Some banks selling stock fell for a second day. Regions Financial tumbled 57 cents, or 9.6%, to $5.35, while SunTrust Banks fell $2.30, or 12.4%, to $16.21.
Investors in the nation's big automakers also worried about seeing the value of their shares diluted. Ford Motor, which hasn't taken government aid, fell $1.07, or 17.6%, to $5.01 after announcing a stock offering.
GM shares tumbled to their lowest level since 1933 as investors worried that their shares would lose value if more are issued or the company declares bankruptcy. The company faces a June 1 restructuring deadline.
GM, one of the 30 stocks that make up the Dow industrials, fell 29 cents, or 20.1%, to $1.15 and traded as low as $1.09.
In other trading, Dow components Pfizer rose 78 cents, or 5.5%, to $14.93, while Coca Cola rose $1.65, or 3.9%, to $44.40.
Homebuilders fell after the National Association of Realtors said home prices slid in nearly nine out of every 10 U.S. cities in the first three months of the year as first-time buyers in search of bargains dominated the market.
Pulte Homes fell 52 cents, or 4.6%, to $10.71, while Toll Brothers fell 48 cents, or 2.4%, to $19.82.
Many retailers slid a day ahead of a government report on retail sales. Macy's, which is expected to report quarterly results Wednesday, fell 34 cents, or 2.7%, to $12.35.
Energy stocks advanced as crude rose above $60 a barrel for the first time since early November before settling on the New York Mercantile Exchange up 35 cents at $58.85 per barrel.
ExxonMobil rose 1.55, or 2.2%, to $70.82, while Schlumberger rose 98 cents, or 1.8%, to $55.75.
In other trading, the Russell 2000 index of smaller companies fell 6.76, or 1.4%, to 495.18.
Three stocks fell for every two that rose on the New York Stock Exchange, where consolidated volume came to 6.7 billion shares compared with 5.9 billion shares traded Monday.
Bond prices fell but pulled off their lows after the Federal Reserve bought about $6 billion in government debt Tuesday as part of its effort to drive down interest rates and reduce the costs of loans like mortgages.
The yield on the benchmark 10-year Treasury note rose to 3.18% from 3.17% late Monday.
The dollar was mixed against other major currencies, while gold prices rose.
Overseas, Britain's FTSE 100 slipped 0.2%, Germany's DAX index lost 0.3%, and France's CAC-40 fell 0.5%. Japan's Nikkei stock average fell 1.6%.