Stocks end choppy session lower
Wall Street slips as worries about bank stress tests and swine flu overshadow a consumer confidence report.
NEW YORK (CNNMoney.com) -- Stocks slipped Tuesday, ending a choppy session with declines as a stronger-than-expected consumer confidence report competed with jitters about the health of U.S. banks and the possible economic impact of swine flu.
The Dow Jones industrial average (INDU) lost 8 points, or 0.1%. The S&P 500 (SPX) index slipped 2 points, or 0.3%. The Nasdaq composite (COMP) eased 5 points, or 0.3%.
Stocks seesawed through the session as investors sorted through the day's news. The indecision came after a six-week-long broad-based rally on bets that the worst for the economy has already happened -- a rally that began to sputter last week as quarterly results came in.
"I think the rally is going to end up getting recharged, but the market is probably going to drift sideways for a while," said Gary Webb, CEO at Webb Financial Group.
This week, investors have been keeping an eye on the banks and the latest reports on the swine flu outbreak.
"The markets are experiencing a bit of a tug-of-war," said Michael Sheldon, chief market strategist at RDM Financial Group.
"The economic news was somewhat better than expected," he said. "However, we've come a long distance over a short period of time and investors continue to worry about the implications of the spread of the flu virus."
Sheldon said the two biggest longer-term issues that remain unresolved are a bottom in the housing market and the potential need for more capital among the country's banks.
Wednesday brings the conclusion of the Federal Reserve's two-day policy meeting, in which the central bank is expected to hold interest rates steady at historic levels near zero.
Wednesday also brings the reading on first-quarter gross domestic product growth. GDP is expected to have shrank at a 4.7% annualized rate after shrinking at a rate of 6.3% in the fourth quarter.
Confidence improves: The April consumer confidence index rose to 39.2 from a revised 26.9 in the previous month. Economists surveyed by Briefing.com thought it would improve to 29.7.
Bank sector: Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) will need to raise more capital, according to initial government "stress tests," the Wall Street Journal reported. Regulators reportedly told the banks that they need to boost their reserves to prepare for a potential worsening of the economy.
Results of Treasury's tests of the largest U.S. banks aren't due until next week. Citi, saying it couldn't disclose test results, issued a statement assuring that its capital base is strong.
Bank of America shares fell 8.6%, Citi dropped 6% and the KBW Bank (BKX) sector index fell 3%.
Swine flu: Concerns about the economic impact of the swine flu outbreak remained in place Tuesday as health officials have confirmed at least 90 cases of the disease worldwide and 50 in the United States.
Economists are concerned that should the outbreak become a large-scale pandemic, it would throw off a global economic recovery attempt and even intensify the recession.
Automakers: Chrysler said it has made a deal with its creditors to reduce $7 billion in loans, inching it closer to resolving its financial crisis. Over the weekend, the automaker said it won key concessions from its union. The company also needs to hammer out a deal with Italian automaker Fiat ahead of the Thursday deadline to avoid bankruptcy.
Both Chrysler and General Motors (GM, Fortune 500) have been getting by on billions in government aid. General Motors has until June 1 to cut debt and avoid bankruptcy. On Monday, the company announced a broad restructuring plan.
Quarterly results: Drugmakers Pfizer (PFE, Fortune 500) and Bristol-Myers Squibb (BMY, Fortune 500) reported results Tuesday morning.
Pfizer reported lower quarterly earnings that topped expectations on lower revenue that missed expectations. The company saw sales of its blockbuster Lipitor lose out to cheaper generic versions. However, cost cutting helped limit any declines.
Bristol-Myers Squibb reported weaker earnings that topped estimates on higher revenue that missed estimates. The company was hurt by weaker sales of Erbitux, its colon cancer medicine.
Company news: IBM (IBM, Fortune 500) said Tuesday that it will increase its quarterly dividend by 10% and will buy another $3 billion of its outstanding stock.
In other news, biotech Dendreon (DNDN) said its experimental treatment added four months to the lives of men with advanced prostate cancer. But Dendreon shares tumbled 45% before the stock was halted, ahead of the news.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by a narrow margin on volume of 1.07 billion shares. On the Nasdaq, advancers beat decliners five to four on volume of 1.95 billion shares.
Economy: The S&P/Case Shiller 20-city home price index fell 18.6% in February from a year ago, extending the losing streak to 31 months. But it was the first time since October 2007 that the index didn't hit a record low in its year-over-year drop.
Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.01% from 2.92% Monday. Treasury prices and yields move in opposite directions.
Lending rates were mixed. The 3-month Libor rate fell to 1.04% from 1.05% Monday, according to Bloomberg.com. The overnight Libor rate was unchanged at 0.21%. Libor is a bank-to-bank lending rate.
Other markets: In global trading, Asian and European markets ended lower.
In currency trading, the dollar fell versus the euro and the yen.
U.S. light crude oil for June delivery slipped 90 cents to settle at $49.24 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery fell $14.60 to settle at $893.60 an ounce. 
