MARKET SNAPSHOT: U.S. Stocks Struggle For Direction As Political Uncertainty Drags

By Wallace Witkowski, MarketWatch , Ryan Vlastelica Features Dow Jones Newswires

Home Depot rises after results, providing support to the Dow

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U.S. stocks struggled for direction Tuesday, shifting between slight gains and losses after reaching record levels, as the latest bout of political uncertainty in the U.S. was seen as a headwind that could limit the market's advance.

The Dow Jones Industrial Average rose 5 points, or less than 0.1%, to 20,986. While shares of Microsoft Corp. (MSFT), Home Depot Inc. (HD), and International Business Machines Corp. (IBM) boosted the average with 1% or more gains, shares of Nike Inc.(NKE), UnitedHealth Group Inc. (UNH), and Pfizer Inc.(PFE) capped gains for the blue-chip gauge.

The S&P 500 index slipped 2 points, or less than 0.1%, to 2,401. Earlier in the session, the benchmark eked out an all-time intraday high of 2,405.77. The day's move was broad but slight. While nine of the 11 primary S&P 500 sectors opened higher, only four remained in the green in afternoon trading, with the energy and real-estate sectors the worst performers.

Meanwhile, the Nasdaq Composite Index was setting intraday records over the session and last traded up 14 points to 6,163.

Stocks have been propelled higher recently by some strong corporate results and hopes that President Donald Trump's administration will pass tax reform and other legislative initiatives that are seen as market friendly. However, the rally has shown signs of stalling of late, despite marking records. Benchmarks have made slight daily moves, a sign that investors see few reasons to keep pushing shares higher. By some metrics, valuations are at their highest level in more than a decade (

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See also:As profit expectations drop, Goldman Sachs says the stock market rally may hit the brakes (

"Prices aren't at all justified by valuations or economic data. Wall Street can still rise over the coming days or even months, but I think you're taking a lot of risk by staying in the S&P 500," said Adam Strauss, portfolio manager at Appleseed Fund. "In general, U.S. stocks are unattractive, though there are some idiosyncratic value opportunities within the market."

Investors were also assessing reports that Trump had shared sensitive intelligence ( obtained from a close U.S. ally with Russia's foreign minister and ambassador. In a news briefing, White House National Security Adviser H.R. McMaster defended Trump's conversations with the Russians as "wholly appropriate." ( The new controversy comes mere days after Trump fired James Comey, the now-former director. of the Federal Bureau of Investigation

"I think the market's done with politics for now, not until you get a real story, not 'he said, she said,'" remarked Joe Saluzzi, co-head of equity trading at Themis Trading, in an interview.

Following a nice run up in stocks, investors are willing to be patient until there are indications of more growth, or something more concrete out of Washington on health-care, taxes, or infrastructure, Saluzzi said. One indicator, Saluzzi likes to follow is CNN's Fear & Greed Index (, which follows seven investor sentiment metrics, and is currently in "greed" territory.

Other markets: Oil futures slipped 0.3%, on a day of slight gains and losses. Expectations that the Organization of the Petroleum Exporting Countries will extend production cuts until early next year continue to boost trading sentiment ( Energy shares fell 0.6%, having previously been the strongest industry on the day, rising as much as 0.3%.

European stocks ( finished slightly lower, while Asian markets largely closed higher (

Read:Why stock-market investors are falling back in love with Europe (

Gold futures gained 0.5%, as a key dollar index lost 0.7%. Some analysts are blaming the buck's drop to a six-month low ( on worries about Trump sharing classified information with Russia (

"There's been a lot of political volatility, but it hasn't hurt the stock market," Strauss said. "Having said that, political issues could lead to a lower value for the dollar, which we expect will happen."

Economic news: Housing starts fell 2.6% in April, coming in below expectations ( Separately, industrial production grew at the fastest monthly rate ( in more than three years, topping analysts' forecasts.

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No Federal Reserve officials are expected to deliver speeches on Tuesday.

Individual movers: Home Depot (HD) gained 1.4% after the home-improvement retailer's quarterly earnings topped Wall Street's estimates ( The stock was one of the leaders on the Dow industrials.

Shares in Ford Motor Co.(F) were flat following news the auto maker is planning substantial cuts to its global workforce ( amid a drive to boost profit and address Ford's sliding stock price.

Snap Inc.(SNAP) sank 1.3%, reversing a premarket rally of more than 8% that came after billionaire investor George Soros's hedge fund disclosed a stake ( in the Snapchat parent.

Etsy Inc.(ETSY) advanced 23% after two private-equity firms revealed they've bet ( on the online marketplace for handmade products.

Tesla Inc.(TSLA) rose 0.4% following news that Lyndon Rive, head of the SolarCity business, will leave Tesla next month (, less than a year after the solar-power outfit was acquired by the maker of electric cars.

Staples Inc.(SPLS) sank 3.7% after the seller of office supplies posted same-store sales that beat expectations (, while matching forecasts on quarterly profit.

Advanced Micro Devices Inc.(AMD) shares surged 7.6% following a report ( Intel Corp. (INTC) will license the company's graphics chips after a deal with Nvidia Corp.(NVDA) expires.

--Victor Reklaitis in London contributed to this article.

(END) Dow Jones Newswires

May 16, 2017 13:28 ET (17:28 GMT)