The Dow Jones Industrial Average ended an unsettled session with gains as a rally in Caterpillar (CAT - Get Report) shares offset pressure from the consumer sector. 

The Dow added 0.19% after briefly turning red earlier in the session. Caterpillar jumped 2%, contributing the most to the Dow's gains, after Goldman Sachs added it to its "Conviction Buy" list. Analysts said they are bullish on Caterpillar given "structurally higher mid-cycle" earnings per share, management's focus on improving returns of capital, and the company's "exposure to under-invested machinery markets in the early stages of recovery."

The rest of the market was in the red before coming back in the final minutes of the day. The S&P 500 rose by 0.05% and Nasdaq finished up 0.07% as losses in the consumer space extended into day two. The sector had sold off on Monday after disappointing monthly auto sales from Ford (F - Get Report) and General Motors (GM - Get Report) .

Acuity Brands (AYI - Get Report) was one of the worst performers in the cyclical consumer sector after a weak second quarter. The lighting fixtures company earned an adjusted $1.77 a share, 5 cents below estimates. Revenue of $804.7 million missed consensus of $829 million. The stock fell 14%.

Other laggards in the sector included TJX Cos.  (TJX - Get Report) , Panera Bread (PNRA) , Target (TGT - Get Report) , Ross Stores (ROST - Get Report)  and VF Corp (VFC) . The Consumer Discretionary SPDR ETF (XLY - Get Report) fell 0.15%. 

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Richmond Federal Reserve President Jeffrey Lacker tendered his resignation Tuesday after improperly sharing information with an analyst back in 2012. Lacker broke confidentiality rules when he offered information to Medley Global Advisors regarding the Fed's September meeting in 2012. Lacker was already planning to retire. Vice President Mark Mullinix will act as Richmond Fed president until a permanent replacement can be found. 

Nerves rose over a politically fraught meeting between Donald Trump and China's President Xi Jinping later this week. Trump and Xi are set to meet on Thursday and Friday at Mar-a-Lago in Florida and are expected to discuss North Korea, trade, and currencies. Trump has been highly critical of China, accusing the country of manipulating its currency and stealing U.S. jobs. Trump recently said that if China does not help out in the fight against North Korea, the U.S. will do it on its own, though many argue China is in the unique position of being one of the only countries that could do so. 

"The most negative scenario would see Trump deliver on his campaign rhetoric, slamming a 45% tariff on U.S. imports from China," Michala Marcussen, global head of economics at Societe Generale, wrote in a note. "At the other end of the spectra, China could promise to support Trump's infrastructure plans and thus also job creation in the US ... Our baseline assumption remains that an outright trade war will be averted."

The U.S. trade deficit in February largely erased an increase seen the month earlier. The deficit fell by 9.6% to $43.6 billion in February after jumping 9.6% to $48.5 billion in January. The deficit had hit its highest level in nearly five years in the first month of the year. Imports fell 1.8% in February, while exports increased 0.2%. 

Factory orders increased 1% in February, according to the Census Bureau. The result was in line with consensus estimates. Orders had risen 1.2% in January. New orders for manufactured goods have increased in seven of the past eight months. 

U.S. handbag maker Kate Spade (KATE)  slumped 14% on reports it will spend a few more weeks negotiating a potential sale of the company after receiving an offer last week from Coach (COH)  . Michael Kors (KORS) also remains interested in Kate Spade, though it hasn't been pursuing an acquisition of the company as actively as rival fashion accessories maker Coach, according to Reuters

Staples (SPLS) rocketed 9% higher on reports the company is exploring a potential sale. The Wall Street Journal reported that the stationery chain had held talks with buyout firms and that it could be worth at least around $7 billion.

Amazon (AMZN - Get Report) rose 1.7% on Tuesday after a bullish note from BMO Capital Markets. Analyst Daniel Salmon raised his price target to $1,200 and backed his outperform rating, noting that Amazon could benefit from the "significant emerging opportunity" in advertising. Salmon expects Amazon ad revenue to rise 65% to $3.5 billion this year. 

Nvidia ( NVDA - Get Report) declined 7% after Pacific Crest reduced its rating to underweight from sector weight. Analyst Michael McConnell said he grows worried over "lower margins from incremental Nintendo Switch revenue and a possible pause in the company's datacenter business this summer."
 

SeaDrill (SDRL) lost more than half its value on Tuesday after concerns rose over a potential bankruptcy. Shares plummeted 51% after the company said it had entered a debt restructuring deal. "We currently believe that a comprehensive restructuring plan will require a substantial impairment or conversion of our bonds, as well as impairment, losses or substantial dilution for other stakeholders," the company said in a statement. 

Apple (AAPL - Get Report) was slightly higher after Pacific Crest warned of slowing growth ahead. Analyst Andy Hargreaves retained his overweight rating on Apple and raised his price target to $150 from $140, though said further growth would "slow substantially" and that dividend increases and tax reform might be "necessary to drive significant upside." Pacific Crest remains bullish on iPhone unit sales estimates. 

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Goldman upgraded its rating on Mondelez (MDLZ - Get Report) to buy from neutral and added the stock to its "Conviction Buy" list. The firm said snack brands are a "global bright spot."

Ralph Lauren (RL - Get Report) announced layoffs on Tuesday, one of the steps to supports its "Way Forward Plan" first announced in June. The company is expecting that it will incur about $370 million in charges related to the plan. Ralph Lauren will also be closing its dedicated Polo store at 711 Fifth Ave. and will integrate those products into its flagship stores on Madison Avenue and other downtown New York locations. The stock declined 4.6%.

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