Associated Press Stocks slip as traders take profits after surge

Street slips as traders take profits after big jump; 'Stress test' results loom; Dow falls 16

NEW YORK (AP) -- Sometimes a down day on Wall Street can be a good thing -- especially when it shows that investors are carefully weighing their next steps.

Traders collected a few profits Tuesday, leaving the major indexes with fairly modest losses, as the market waited for key reports on the government's assessment of banks' health and the latest numbers on jobs.

But stocks held on to most of their gains from Monday, which saw the Standard & Poor's 500 index recoup the last of its losses since the beginning of the year. That advance came on hopeful signs in the housing market and extended a two-month rally that brought stocks up from 12-year lows.

"Today's action, just drifting around, is not that surprising given Monday's rally," said Darin Newsom, a senior analyst at DTN in Omaha, Neb.

Many analysts believe it's actually good for the market to pause after a big advance, particularly when Wall Street has had its best two-month performance in nearly 35 years. Tuesday's showing proved that investors aren't buying with abandon, and are considering whether they want to put more money into stocks given the challenges the market faces later this week.

On Thursday, the government will release results of its stress tests on banks, and on Friday, the Labor Department issues some of the most closely watched data on the Street, its monthly tally of job losses and unemployment.

The Dow fell 16.09, or 0.2 percent, to 8,410.65.

The Standard & Poor's 500 index fell 3.44, or 0.4 percent, to 903.80. The modest pullback left the index essentially flat for the year to date. The S&P 500 is widely used as a benchmark for mutual funds and other investments.

The Nasdaq composite index lost 9.44, or 0.5 percent, to 1,754.12, and the Russell 2000 index of smaller companies fell 4.27, or 0.8 percent, to 502.55. more...