NEW YORK U.S. stocks slipped on Tuesday as investor caution took hold on the day before the Federal Reserve chairman's congressional testimony, while losses in commodity shares and utilities weighed on major indexes.
After rising for eight straight sessions, the S&P 500 fell in midday trading. Nine of the 10 S&P 500 industry sector indexes declined. Energy and material shares ranked among the day's worst performers, with Marathon Petroleum (MPC.N) falling 5.2 percent to $69.32 and Alcoa (AA.N) sliding 1.1 percent to $8.08.
Financial stocks, which started the day as outperformers, also dropped despite strong earnings from Goldman Sachs (GS.N). The S&P financial sector index .SPSY fell 0.6 percent.
Goldman Sachs reported quarterly profit doubled as the bank made more money trading bonds before an interest-rate spike hit markets in June. But Goldman's stock slid 1.9 percent to $159.90 as investors fretted that the results could not be easily repeated.
Coca-Cola Co (KO.N) was the Dow's worst performer and dragged on the S&P 500 after the world's largest soft drinks maker reported weaker-than-expected second-quarter sales, which it blamed on economic malaise and unusually poor weather. The stock fell 1.4 percent to $40.42.
"I think this happens when we don't have a tremendous amount of news. We don't have a lot of participants in the market," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. "We've had some so-so news."
Volume on Monday was the lightest of any full trading day this year, with just 4.91 billion shares traded on U.S. exchanges. The Dow and the S&P 500 extended gains to close at fresh record highs, and the Nasdaq posted its best close since September 2000.
Trading was expected to remain subdued ahead of Federal Reserve Chairman Ben Bernanke's testimony on Wednesday before the House Financial Services Committee. His comments will be closely analyzed for signs of when the central bank may start reducing its stimulus efforts.
The Dow Jones Industrial Average .DJI was down 62.20 points, or 0.40 percent, at 15,422.06. The Standard & Poor's 500 Index .SPX lost 9.94 points, or 0.59 percent, at 1,672.56, and the Nasdaq Composite Index .IXIC fell 15.34 points, or 0.43 percent, at 3,592.16.
Johnson & Johnson (JNJ.N) shares dipped 0.2 percent to $90.26 after the Dow component reported higher-than-expected second-quarter earnings. Strong sales of prescription drugs and medical devices more than offset anemic growth of its consumer products, Johnson & Johnson said.
Analysts expect S&P 500 companies' second-quarter earnings to have grown 3 percent from a year earlier, with revenue up 1.5 percent, data from Thomson Reuters showed.
Tom Schrader, managing director for U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore, said climbing gasoline prices could also be responsible for a downturn in the market.
Wholesale gasoline is up 14 percent so far this month.
"I think it's primarily due to the concern that with gasoline prices going up as hard as they have in the past few days that they're going to pinch the consumer and dampen the recovery we've got going on," he said.
U.S. homebuilder confidence rose in July to its strongest level in 7-1/2 years as tightening supply and solid demand fueled the sector's recovery even in the face of rising mortgage rates.
Shares of Masco Corp (MAS.N), which makes faucets, cabinets and insulation products, rose 0.5 percent to $20.51 following news of the surge in homebuilder confidence this month.
Tesla Motors (TSLA.O) tumbled 11.8 percent to $112.28 and weighed on the Nasdaq 100 .NDX after Goldman Sachs moved its price target for the luxury electric-car maker's stock to $84 from $61. The change, though higher, still undercut Tesla's current price. Goldman's most bullish case sets the stock's price near $113.
(Editing by Jan Paschal)