Stocks struggled to hold their gains in narrow range trading Tuesday, as investors digested encouraging economic data from China and Europe against expectations for modest earnings growth.
The Dow Jones Industrial Average toggled in and out of negative territory. Intel led the blue-chip gainers, while Procter & Gamble lagged.
The S&P 500 and the Nasdaq held small gains. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.
Among key S&P sectors, materials gained, while consumer discretionary traded in the red.
Alcoa edged higher after the aluminum producer reported an increase in quarterly profit as performance in its alumina and primary metals segments improved despite a tough market. Revenue, however, fell slightly short of estimates. Still Alcoa CEO Klaus Kleinfeld told CNBC that he remains "relatively optimistic" that 2013 will be better than 2012 and continues to project 7 percent global demand growth in aluminum.
Alcoa unofficially kicks off this quarter's earnings season, which is expected to be fairly weak.
(Read More: Earnings Season Could Bring 'April Anxiety')
For the first quarter, earnings growth is expected to gain by just 1.6 percent, compared to 6.2 percent last quarter, according to Thomson Reuters. The negative warnings are higher than usual?with 108 negative revisions for S&P 500 companies. Compared to the 23 positive revisions, it is the worst pace in 12 years, according to Thomson Reuters data.
Banking giants JPMorgan and Wells Fargo are slated to post earnings on Friday.
(Read More: Earnings Season Arrives as Data Flash Warning Signs)
Herbalife shares were temporarily halted amid news that KPMG resigned as auditor for the nutrition, weight management and skin-care products company, according to the New York Times.
Meanwhile, Skechers shares were also halted. KPMG also has been the auditor for the footwear retailer.
(Read More: Once Shunned, Funds Now Ally With Activist Investors)
JCPenney slumped to lead the S&P 500 laggards after the company said former CEO Myron Ullman will return as the retailer's chief after Ron Johnson was ousted by the board. Ullman will an annual base salary of $1 million.
Disney slipped slightly as the conglomerate readies to lay off 150 people this week, according to sources close to the situation. The job cuts will be predominately in home entertainment, as the company adjusts to industry-wide declines in DVD sales.
On the economic front, wholesale inventories slipped by 0.3 percent to a seasonally adjusted $501.36 billion in February, according to the Commerce Department. Economists polled by Reuters expected a gain of 0.5 percent, versus January's 1.2 percent increase. The change in February inventories is the biggest decline since September 2011.
In Europe, industrial production in the U.K. rose by more than expected in February, diminishing the risk the economy slipped back into recession in the first quarter of 2013.
(Read More: In Effort to 'Rebalance,' Europe Sticks to Austerity)
Meanwhile, U.S. Treasury Secretary Jack Lew pushed for a growth rather than an austerity agenda during the first day of his two-day visit to Europe. Speaking in Brussels, Lew said that the U.S. had an "immense stake in Europe's health and stability" and called on Europe to boost demand.
China's annual consumer inflation eased to 2.1 percent in March from February's 3.2 percent while producer price deflation deepened, data showed on Tuesday, leaving policymakers room to keep monetary conditions easy and nurture a nascent recovery.
Traders will be looking out for clues about the future of quantitative easingthis week, with the Federal Reserve set to release minutes from its last meeting on Wednesday.There are also several appearances by Fed officials this week, including anti-inflation hawk Jeffrey Lacker and Atlanta Federal Reserve President Dennis Lockhart on Tuesday.
(Read More: Pimco's Bill Gross: Beware of 'Monetary Red Bull')
U.S. Fed Chairman Ben Bernanke spoke overnight on Monday at an Atlanta Fed conference. In a speech that did not directly touch on monetary policy, Bernanke hinted at why the central bank continues to pursue ultra-easy monetary policy.
"The economy is significantly stronger than it was four years ago, although conditions are clearly still far from where we would all like them to be," he said.
Meanwhile, St. Louis Federal Reserve Bank President James Bullard told CNBC that he'd be willing to reduce the central bank's massive bond-buying program in "small increments."
In the bond markets, the Treasury will sell $32 billion in three-year notes with the results available shortly after 1pm ET.
The National Federation of Independent Business reported that business confidence fell again in March, with its index dropping 1.3 points to 89.5 despite anticipation that the measure would rise.
?By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
? 2013 CNBC LLC. All Rights Reserved
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