U.S. consumer spending still weak

Stocks slipped following reports of weak home sales—a sign that overall U.S. consumer spending remains weak.

The Dow Jones Industrial Average fell 11.94 points, or 0.1%, to end at 10572.02. The blue-chip measure was led lower by a 3.1% decline in Alcoa, which is often sensitive to housing reports as a harbinger of demand for aluminum.

The Dow’s losses were tempered by a 4.9% surge in Kraft Foods after large shareholder and billionaire Warren Buffett moved to block Kraft from issuing shares to fund its offer for Cadbury.

The Standard & Poor’s 500-stock index rose 0.3%, led by a 1.7% gain in its financial sector.

Stocks had begun the year with a strong start, with the Dow rallying 155.91 points, or 1.5%, on Monday and the S&P 500 and Nasdaq producing comparable percentage gains. Investors are watching the market moves especially closely because January is generally seen as a harbinger of stocks’ performance for the rest of the year.

The Dow is up 61.48% from its 12-year close low of 6547.05 hit on March 9.

“We’re at a pretty important juncture in the market to see whether we’ll break out of a trading range,” said portfolio manager Uri Landesman, of ING Investment Management. “We’re at a point where you have to believe in a decent [U.S. economic] recovery to consider stocks cheap.”

The National Association of Realtors said its index of pending home sales plunged 16%, a much bigger decline than analysts expected.

Investors also paid attention to a series of sales reports from major auto makers Tuesday. The most upbeat was from Ford Motor, which rallied 6.6% after posting a 33% jump in December light-vehicle sales in the U.S.

Commodity prices rose modestly. Gold futures gained for a third straight day, up 40 cents to end at $1,118.10 an ounce in New York. Oil prices rose 26 cents to $81.77 per barrel.

The dollar rose 0.3% against the euro. Treasury prices rose.