NEW YORK (CNN/Money) - Uncertainty all around. The possibility that Saddam is dead and the end of the war is in sight helped the markets recover on Tuesday afternoon after profit warnings sank stocks in the morning. But investors have heard those rumors of a quick end to the war before, so caution was still the watchword. Above all, investors realize that the post-war state of the economy is still as unclear as ever.

On the constantly tipping seesaw of economic news we got another mixed bag today: Consumer confidence rebounded in April more sharply than it did after 9/11. The monthly Economic Optimism index rose to 56.4, a 10-month high, from 48.8 the prior month. Meanwhile, February news on inventories was glum: As sales fell, wholesale inventories rose 0.3 percent, more than economists had expected. Another huge drag was the biggest drop in wholesale auto sales since December 1997.

After a light day of trading the Dow closed down 1.49, at 8,298.92, the Nasdaq fell 6.57 points to 1,392.94, and the S&P 500 dropped 1.64 points to 878.29. Read Loose Change for the latest update on the AOL Time Warner building.

STOCKYARD Let's start with some good news -- there was a bit, and in freezing, rainy Manhattan, we could use a ray of sunshine. The Dow saw gains from Microsoft, Citigroup and General Electric among others. Altria (the ciggie company formerly known as big MO) got a boost after an Illinois judge temporarily blocked a $3 billion punitive-damages award the company had been ordered to pay as part of a class-action verdict against Philip Morris USA. MO, which has been battered by lawsuits, added 98 cents to close at $30...

McDonald's has a fat battle to boost sales ahead of it. Today the company took a step toward getting leaner, saying it would reduce its 2003 budget for restaurant refurbishments and openings by $700 million. It also promised to up its dividend. Wall Street may be relieved by McDonald's determination to reduce debt, but on the whole, analysts are still skeptical. MCD stock gained four cents today to $15.84.

NOW FOR THE LOSERS Walt Disney said it plans to sell about $1 billion worth of senior convertible notes, and earlier, Morgan Stanley cut its 2003 earnings estimates to account for the estimated near-term impact of the war and the heightened risk of terrorism. DIS shares lost 61 cents to $17.13.

A tour of other tumbling stocks: Exercise equipment maker Nautilus Group lowered its outlook for the first quarter and cut its earnings forecast below the consensus estimate of analysts. Shares of NLS dropped $3.71 to $11.19. RF Micro Devices said it expected to post a wider than expected loss, which sent shares of RFMD falling 12 percent to $5.33. Microchip said it missed its previously reduced financial targets. MCHP shares slid nearly 9 percent to $18.76. And airline stocks continued to tumble on a Smith Barney downgrade.

RETAIL WOES? Blame it on the weather...and the war, of course. Wet weather across much of the country has brought on a dry spell for retail. Sales at U.S. chain stores fell last week, capping off a month-long slide, and another report showed that chain store sales fell for most of March.

And you might not guess, but another reason sales look so bad this year is because Easter falls later than usual, hurting year-over-year comparisons. Don't get your hopes up that the belated Easter Bunny will bring out shoppers; UBS Warburg retail analysts say they expect industry weakness through at least October. Look for retailers' reports of March same-store sales on Thursday.

Wal-Mart was ahead of the game and warned that sales would be on the lower end of its forecast. The Bentonville behemoth (#1 on the 2003 Fortune 500) saw its stock pick up 24 cents to $54.56.

HIGH ON DRUG (STORES) Consumers may not be buying cars anymore, but they certainly haven't stopped shopping at drug stores. Rite Aid's same-store sales rose 2.4 percent in March, with pharmacy same-store sales up 5.8 percent. This sent RAD stock up 8 cents to $2.66. Competitor CVS saw same-store sales for the five weeks ended March 29 grow 2.3 percent, with total sales rising $2.4 billion. Shares of CVS were little changed, losing three cents to close at $24.17.

Drug stores may be raking in customers, but don't get too excited about the pharmacy biz: Today, pharmacy services provider Accredo Health lowered its outlook for the fiscal year ending June 30, saying it may have to take a charge related to a recent acquisition. Shares of ACDO dropped a whopping 44 percent to $14.29.

Just when New York couldn't look any more grim, and just when AOL Time Warner (CNN/Money's parent company) couldn't look more battered, a fire damaged the new AOL Time Warner building under construction in Manhattan's Columbus Circle. This isn't the only disaster to strike the construction site -- last year, winds blew plywood off the building, killing one person and injuring three others, according to reports. It took 170 firefighters two hours to put out Tuesday's blaze at the 2.1 million-square foot, $1.7 billion complex supposedly slated to open in September...

Looking to pass the buck? The newest scapegoat is SARS: Though airlines and hotels have a clear explanation of how the mystery illness has hurt their business, be on the lookout for all sorts of companies to blame their less-than-stellar earnings on the acronym from hell. The truth is, this is a rather new nightmare, and it'll take a while before it really affects earnings.

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