Stocks Maintain Downward Drift

Updated from 10:56 a.m. EDT

Stocks in the U.S. were sagging Tuesday as investors digested a cautious outlook at Wal-Mart (WMT Quote), the return of surging oil futures, and sobering words on the liquidity crisis from Federal Reserve chairman Ben Bernanke.

The Dow Jones Industrial Average surrendered 66 points to 12,810, pressured both by Wal-Mart and its worst-performing component of the day, Hewlett-Packard (HPQ Quote). The S&P 500 was off 3 points at 1401, and the Nasdaq Composite was slipping 7 points at 2481.

"It seems like people are on hold to see whether we'll actually see the second-half recovery occur," said Charles Rotblut, senior market analyst with Zacks Investment Research. "We're entering a period without a lot of catalysts. Earnings season is over, and the Fed is on hold at least until August."

"We're in no-man's land," said Fred Dickson, senior vice president and market strategist with D.A. Davidson. "Little incremental news items have what appear to be fairly significant intraday market impact, but when you look at it over four or five days, they cancel each other out."

Dickson added that that there isn't enough good news to push investors on the buy side much higher, and further drags remain in stubbornly high oil prices and the weak U.S. dollar.

"Overall, investor confidence seems very, very low," he said. "The real good news is that we haven't seen big drops on light volume, and typically that's what we'll see in a really crummy market." He noted that that excludes "occasional" drops like the one that occurred Friday, which was, at any rate, followed by a Monday bounce-back.