U.S. Stocks Edge Up; Apple Weighs On Tech

U.S. stocks ended slightly higher Tuesday after mixed economic data and before major earnings releases, while further losses for Apple Inc. weighed on the technology sector.

The Dow Jones Industrial Average  rose 27.57 points, or 0.2%, to 13,534.89. Hewlett-Packard Co.  fell 2.5%, the biggest decliner in the Dow, while Microsoft Corp.  rose 1.2%, the biggest gainer in the blue-chip benchmark.

The S&P 500 Index  gained 1.66 points, or 0.1%, to 1,472.34, with telecommunications the biggest laggard and consumer discretionary faring best among its 10 major sectors.

Apple  was the biggest decliner in the S&P 500. Its shares dropped 3.2% to $485.92 a day after the consumer-technology company’s drop pushed two of the three benchmark indexes into the red. Apple lost nearly 4% Monday on reports that it had cut orders for iPhone 5 parts on weak demand.

Pressured by Apple, the Nasdaq Composite Index  shed 6.72 points, or 0.2%, to 3,110.78.

Also in the tech sector, shares of Dell Inc.  rose 7.2%, a day after reports that the PC maker was considering a buyout with two private-equity firms.

At an event in Silicon Valley, Facebook Inc.  unveiled a “Graph Search” feature. Shares of the social-networking company fell 2.7%. Read more about Facebook’s event in MarketWatch’s live blog.

The earnings season starts heating up later this week, with reports due from some of America’s biggest companies. Analysts at Goldman Sachs expect “uninspiring results that are unlikely to prompt further index upside.” They expect the S&P 500 to fall 1.5% from Friday’s close in the next three months, but then post a 7% increase for 2013. Read more: Goldman Sachs puts a fork in earnings season.

“Here we are on the eve of bank earnings coming out tomorrow,” said Peter Cardillo, chief market economist at Rockwell Global Capital, pointing to both J.P. Morgan Chase & Co.  and Goldman Sachs Group Inc. , as due to turn in their quarterly report cards.

“Then we have other banking stocks on Thursday and Friday, along with General Electric Co. , so the market remains on the skittish sidelines here,” he added.

More than 600 million shares traded on the New York Stock Exchange.

Composite volume topped 3.1 billion.

“Over the next week, mixed economic data and earnings are likely to keep the market quite defensive, so we’re probably headed to a shallow pullback of 2% to 3%,” Rockwell Global’s Cardillo said.

Also Tuesday, investors digested economic reports that showed U.S. retail sales climbing 0.5% and producer prices off 0.2% in December, while a gauge of manufacturing activity in the New York region contracted in January.

“We did have some better-than-expected retail sales … thanks to Detroit, and inflation at the producer level is obviously not a problem. The one thing that did take me by surprise was the New York manufacturing index, which was worse, as I was looking for a small gain here,” added Cardillo.

Investors also kept tabs on the latest doings out of Washington.

Federal Reserve Chairman Ben Bernanke said Monday afternoon that the central bank’s aggressive bond-buying program is unlikely to lead to higher inflation. He also said that Congress should swiftly raise the debt ceiling.

Fitch Ratings reiterated its warning Tuesday that a delay in raising that ceiling would lead to a formal review of the country’s AAA credit rating. On Monday, Treasury Secretary Timothy Geithner said the United States could hit the debt ceiling between mid-February and early March unless Congress took action to raise it.

Marketwatch