U.S. stocks edge higher after see-saw session

U.S. stocks ended slightly higher Tuesday as better housing and auto sales data offset a pullback in oil prices and some new stock issuance by U.S. banks. After spending much of the day ricocheting between gains and losses, stocks in Wall Street slightly extended gains despite a drawback in financials as the latest economic data offered investors more upside surprises.

Investors slowed their move into the market from a sprint to a walk. "The economy has to recover nicely to justify the recent run-up and I don't know whether it's got that much momentum in it," noted an analyst.

The Dow rose 19.43, or 0.2 percent, to 8,740.87. The index at times traded above 8,776.39, its finish for 2008. While it remains down moderately for the year, the Dow is up 5.3 percent in four days, its best run since early April. The Standard & Poor's 500 index rose 1.87, or 0.2 percent, to 944.74, and the Nasdaq composite index rose 8.12, or 0.4 percent, to 1,836.80. Both indexes are up for 2009.

Financial stocks mostly lost ground as several banks said they would sell shares to raise capital. Adding to their share base can dilute the value of existing shares. This week investors will be closely watching a stream of economic reports -- particularly the monthly jobs data on Friday -- for more signals on where to take the market next.

Rally’s Steam Wanes As Financials Continue To Flag

Equity prices may yet head higher in the final month of the second quarter, and investors who have expressed some doubts about the rally’s legs may yet be lured off the sidelines. But the doubters prevailed, for the most part, in Tuesday’s trading session, as a tepid move by major market averages showed little of the brio that marked Monday’s rally, when investors who sat out the 5% gain in May showed some urgency to commit capital to the market.

The S&P 500 Index finished in the black for the fourth consecutive trading session, but the gains proved to be a a shadow of sprawling advance of the three previous trading days, when the index added 50 points in its sturdiest jump in nearly two months. Instead, the index inched up 5 points, or a half-percentage point, to close at 945. Nevertheless, thanks to the recent rally, the index extended a move into new-high territory for calendar 2009.

Financial stocks kept the averages largely in check in the session, as the group continued the underperformance it has logged since topping out early last month after the government released the results of the stress tests of the financial services system.