Stock rally fades despite factory, auto news

A rally that pushed stocks up nearly 7 percent in December took a pause Tuesday as traders shrugged off a pickup in factory orders and a sharp rise in monthly sales from General Motors and Ford.

Stock indexes started out with gains but mostly fell throughout the day, even after a better-than-expected report on factory orders for November. The Dow Jones industrial average of 30 large company shares wound up slightly higher.

Ryan Detrick, a senior analyst at Schaeffer's Investment Research in Cincinnati, said investors were holding off after a sharp jump in stocks on Monday, the first trading day of 2011. "We had a big start to the year yesterday," Detrick said.

The Dow rose 20.43 points, or 0.2 percent, to end the day at 11,691.18. The broader Standard & Poor's 500 index dipped 1.69 points, or 0.1 percent, to close at 1,270.20. The Nasdaq lost 10.27 points, or 0.4 percent, to 2,681.25.

Alcoa Inc. jumped 4.6 percent to $16.52 to lead the 30 stocks that make up the Dow. McDonald's Corp. had the largest fall, losing 3 percent to $74.31.

Nearly two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 1.1 billion shares.

The yield on the 10-year Treasury note edged down to 3.33 percent from 3.34 percent Monday.- AP