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Stocks Slip Below Record Levels

NEW YORK (TheStreet) -- Stocks were trading in the red Tuesday in the absence of any major economic news.

The S&P 500 was down 0.09% to 1,949.48. The Dow Jones Industrial Average was sliding 0.06% to 16,932.50. The Nasdaq was down marginally at 4,335.10. The S&P 500 is now up more than 5.5% in 2014 after surprising much of Wall Street Monday by finishing above 1,950 for the first time following an uneven trading session. While bears in early February warned that the S&P 500 had dropped below its 50-day moving average, and again on April 10, the benchmark index continues to make new highs though on less and less volume.

Bearish contrarians remain on full alert, but "we've been running with the bulls, and continue to do so," Ed Yardeni, the New York-based chief investment strategist at Yardeni Research, wrote in a note. "However, we see the same old reasons for doing so." The major central banks continue to pump liquidity into financial markets, and while some of that liquidity is boosting economic growth, much of it is inflating asset values. Economic growth has been "subpar" in both the U.S. and overseas during the current bull market, but earnings have been very strong.

The forward earnings of the S&P 500 rose to new record highs last week, and at a faster pace in recent weeks, according to Yardeni Research.

Stocks to watch Tuesday include Allergan (AGN - Get Report)Time Warner (TWX) and RadioShack (RSH).

Allergan rejected the latest takeover bid from Valeant Pharmaceuticals (VRX) and activist investor Bill Ackman's Pershing Square Capital Management, saying the offer wasn't even worth talking discussing. Allergan shares fell 0.09% to $164.01.

Time Warner is in talks to buy a large stake in Vice Media for as much as $1 billion, a deal that could include providing Vice with the television network HLN, people with knowledge of the negotiations told The New York Times. The stock rose 0.2% to $69.13.

RadioShack was down 9.4% to $1.40 after posting a quarterly loss that was wider than a year earlier and a same-store sales decline of 14%.

European stocks paused were mixed on Tuesday, with U.K. indices losing ground as news of strong industrial output increased the chances of a near-term rate rise. Asian indices took their cue from Wall Street and closed largely in the green, though Japanese markets retreated as the yen rose.

-- By Andrea Tse in New York

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