Trade Turns Quiet As Indexes Take Small Step Back

Stocks edged down as the recent trend of quiet volume continued Monday.

The Nasdaq, S&P 500 and NYSE composite each slipped 0.1%. The Dow stepped back 0.2%.

Volume was down 16% on the NYSE and 12% on the Nasdaq. For the Nasdaq, it was the slowest trade so far in 2010.

Still, the Nasdaq and the Dow held above their 50-day moving averages, a line they recently reclaimed. The S&P 500 closed under the 50-day line. The NYSE composite hasn't closed above the 50-day in more than four weeks.

One discouraging technical factor is the indexes' Accumulation/Distribution Ratings. While the indexes have risen since Feb. 5, their Acc/Dist Ratings remain at the lowest-possible E.

But among top-rated stocks Monday, action had a positive bias.

In the past couple of weeks, a handful of stocks have broken out. But in most cases, the action is not creating much regret among investors who remain on the sidelines.

With the market in correction, all purchases are risky.

Many of the breakouts have shown contradictory action.

In economic news Monday, the Obama administration unveiled a plan to prop up Medicare by raising taxes on individuals making above $200,000 a year and families making more than $250,000. The new taxes would target interest, dividends, annuities, royalties, rents and capital gains.

The market, however, didn't react much to the news.

Meanwhile, credit card charge-offs jumped in January, but early-stage delinquencies fell for the third month in a row.

5:15 p.m. Update: Some high-rated stocks made sharp moves in after-hours trading following earnings reports late Monday.

Before the open Tuesday, investors can expect the S&P/Case-Shiller home price data to be released.

4:15 p.m. Update: A rally that started around noon EST hit a ceiling in the final hour, sending the market to a narrow loss Monday.

The Dow fell 0.2% as the Nasdaq, NYSE composite and S&P 500 dropped 0.1% each. Volume was lower across the board, according to preliminary figures.

The best industry groups on the day were laggards. That's not ideal. The top group was transportation services. It gained 2.5% and ranked 174th