NEW YORK — 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 wound up slightly higher.
Ryan Detrick, a senior analyst at Schaeffer’s Investment Research, said investors were holding off after a sharp jump in stocks Monday, the first trading day of 2011.
The Standard & Poor’s 500 index lost 0.1 percent after rising 1.1 percent the day before.
Investors also received minutes from the Federal Reserve’s last policy meeting in December. Fed officials said signs of economic growth weren’t enough to cut back its $600 billion bond-buying program, which is aimed at encouraging spending by keeping interest rates low. Fed officials said more time was needed before they would consider changing their plans.
Automakers reported strong December and year- end sales figures. GM rose 2.3 percent, to $37.90, after reporting that its sales of cars and trucks in the U.S. rose 6.3 percent last year. Ford gained 0.8 percent, to $17.38, after reporting that its sales rose 15 percent in 2010.
“These companies finally have the right cost structure and all the players on board to make them profitable businesses,” said Frank Ingarra, a portfolio manager at Hennessy Funds. “The companies that survived are benefiting from facing less competition.”
The Dow rose 20.43 points, or 0.2 percent, to end the day at 11,691.18. The broader S&P 500 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.
