U.S. stocks edged lower Tuesday, as grocers weighed on the market in the wake of a broad downgrade, but an unexpected rise in factory orders kept the losses in check.

The Dow Jones Industrial Average recently shed 7 points, or 0.1%, to 11664, one day after closing at a 28-month high.

The Nasdaq Composite fell 0.4% to 2680. The Standard & Poor's 500-stock index lost 0.3% to 1268.

Traders said the market's moves will likely be modest until 2 p.m. EST, when the U.S. Federal Reserve releases the minutes from its latest meeting.

Investors are very focused on the macro-economic environment right now, said Russell Croft, co-manager of the Croft Value Fund.

"A lot of strategists and chief investment officers out there seem pretty positive for the stock market this year," he said. But "it's one thing to say you're bullish and it's another to see people act on it," he said.

Food retailers in the S&P 500 fell Tuesday after Bank of Montreal downgraded Safeway, Vitamin Shoppe, and Whole Foods to marketperform from outperform, noting limited upside. Shares of Safeway fell 3.9%, Vitamin Shoppe was off 4.9% and Whole Foods shed 3.3%. BMO also reduced its estimates for Supervalu, noting the chain's inability to drive traffic, and Kroger, saying the fiscal year 2011 consensus could be too high given the challenging environment. Supervalu tumbled 8.5%, while Kroger lost 2%.

Morgan Stanley also cut Safeway and Supervalu to underweight from equalweight, noting Supervalu's strategy to reduce prices will collide with inflationary food costs.

However, the market pared steeper earlier declines after the Commerce Department reported that U.S. factory goods orders unexpectedly rose 0.7% in November. Economists surveyed by Dow Jones Newswires had forecast a 0.1% decline.

The telecommunications sector also gained, as shares of Motorola Mobility Holdings rose 7.8% and Motorola Solutions gained 0.2% as Motorola's long-awaited split into two entities officially took place Tuesday. Motorola Mobility consists of the company's consumer-focused smartphone and set-top box business, while Motorola Solutions focuses on handheld communication devices and public-safety radios.

The dollar strengthened against both the euro and the yen. The euro reversed earlier gains to trade recently at $1.3308, down from $1.3351 late Monday in New York.

The U.S. dollar index, which tracks the currency against a basket of others, rose 0.4%. Crude-oil prices slipped, while gold futures declined. Demand for U.S. Treasurys increased, pushing yield on the 10-year note down to 3.32%.

Among stocks in focus, U.S.-listed shares of BP rose 1.9%, touching a six-month high following reports that compensation payouts for the Gulf oil spill may be much lower than expected and lingering rumors that the company is a takeover target.

Borders Group plunged 9.4% after the book retailer's Counsel Thomas Carney and Chief Information Officer D. Scott Laverty resigned. On Tuesday, a unit of closely held Ingram Industries said it would continue to supply books to Borders despite the chain's difficult financial situation.

Drugstore chain Rite Aid gained 2.4% after its same-store sales rose 0.6% from a year earlier in December, exceeding analysts' expectations and marking the first monthly growth since May 2009.

A quarterly cash dividend of $0.38775 per depositary share on the 6.204 percent Non-Cumulative Preferred Stock, Series D, is payable on March 14, 2011 to shareholders of record as of February 28, 2011.

A quarterly cash dividend of $0.255560 per depositary share on the Floating Rate Non-Cumulative Preferred Stock, Series E, is payable on February 15, 2011 to shareholders of record as of January 31, 2011.

A quarterly cash dividend of $0.5125 per depositary share on the 8.20 percent Non-Cumulative Preferred Stock, Series H, is payable on February 1, 2011 to shareholders of record as of January 15, 2011.

A quarterly cash dividend of $0.4140625 per depositary share on the 6.625 percent Non-Cumulative Preferred Stock, Series I, is payable on April 1, 2011 to shareholders of record as of March 15, 2011.

A quarterly cash dividend of $0.453125 per depositary share on the 7.25 percent Non-Cumulative Preferred Stock, Series J, is payable on February 1, 2011 to shareholders of record as of January 15, 2011.

A semi-annual cash dividend of $40.000 per depositary share on the Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K, is payable on January 31, 2011 to shareholders of record as of January 15, 2011.

A quarterly cash dividend of $0.191670 per depositary share on the Floating Rate Non-Cumulative Preferred Stock, Series 1, is payable on February 28, 2011 to shareholders of record as of February 15, 2011.

A quarterly cash dividend of $0.191670 per depositary share on the Floating Rate Non-Cumulative Preferred Stock, Series 2, is payable on February 28, 2011 to shareholders of record as of February 15, 2011.

A quarterly cash dividend of $0.3984375 per depositary share on the 6.375 percent Non-Cumulative Preferred Stock, Series 3, is payable on February 28, 2011 to shareholders of record as of February 15, 2011.

A quarterly cash dividend of $0.255560 per depositary share on the Floating Rate Non-Cumulative Preferred Stock, Series 4, is payable on February 28, 2011 to shareholders of record as of February 15, 2011.

A quarterly cash dividend of $0.255560 per depositary share on the Floating Rate Non-Cumulative Preferred Stock, Series 5, is payable on February 22, 2011 to shareholders of record as of February 1, 2011.

A quarterly cash dividend of $0.418750 per depositary share on the 6.70 percent Noncumulative Perpetual Preferred Stock, Series 6, is payable on March 30, 2011 to shareholders of record as of March 15, 2011.

A quarterly cash dividend of $0.390625 per depositary share on the 6.25 percent Noncumulative Perpetual Preferred Stock, Series 7, is payable on March 30, 2011 to shareholders of record as of March 15, 2011.

A quarterly cash dividend of $0.5390625 per depositary share on the 8.625 percent Non-Cumulative Preferred Stock, Series 8, is payable on February 28, 2011 to shareholders of record as of February 15, 2011.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,900 retail banking offices and approximately 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

CDS spreads on Constellation Brands rallied 24% over the past three months, compared to 9% tightening for the broader sector. 'Credit markets are likely responding to Constellation's announcement that it will be selling some of its businesses and using proceeds to pay down its outstanding debt,' said Author and managing Director Jonathan Di Giambattista. CDS liquidity, however, ticked up one rank to trade in the ninth regional percentile. The markets are still uncertain to a large extent over Constellation's future performance,' said Di Giambattista.

Elsewhere, while KB Home has staged a rally of its own, with CDS spreads tightening 14% over the past three months and credit risk continuing to price in line with 'B' levels. However, ongoing housing market weakness is resulting in still-high CDS liquidity, with KB Home moving up to the 13th regional percentile.

U.S. stocks edged lower Tuesday, as grocers weighed on the market in the wake of a broad downgrade, but an unexpected rise in factory orders kept the losses in check.

The Dow Jones Industrial Average recently shed 7 points, or 0.1%, to 11664, one day after closing at a 28-month high.

The Nasdaq Composite fell 0.4% to 2680. The Standard & Poor's 500-stock index lost 0.3% to 1268.

Traders said the market's moves will likely be modest until 2 p.m. EST, when the U.S. Federal Reserve releases the minutes from its latest meeting.

Investors are very focused on the macro-economic environment right now, said Russell Croft, co-manager of the Croft Value Fund.

"A lot of strategists and chief investment officers out there seem pretty positive for the stock market this year," he said. But "it's one thing to say you're bullish and it's another to see people act on it," he said.

Food retailers in the S&P 500 fell Tuesday after Bank of Montreal downgraded Safeway, Vitamin Shoppe, and Whole Foods to marketperform from outperform, noting limited upside. Shares of Safeway fell 3.9%, Vitamin Shoppe was off 4.9% and Whole Foods shed 3.3%. BMO also reduced its estimates for Supervalu, noting the chain's inability to drive traffic, and Kroger, saying the fiscal year 2011 consensus could be too high given the challenging environment. Supervalu tumbled 8.5%, while Kroger lost 2%.

Morgan Stanley also cut Safeway and Supervalu to underweight from equalweight, noting Supervalu's strategy to reduce prices will collide with inflationary food costs.

However, the market pared steeper earlier declines after the Commerce Department reported that U.S. factory goods orders unexpectedly rose 0.7% in November. Economists surveyed by Dow Jones Newswires had forecast a 0.1% decline.

The telecommunications sector also gained, as shares of Motorola Mobility Holdings rose 7.8% and Motorola Solutions gained 0.2% as Motorola's long-awaited split into two entities officially took place Tuesday. Motorola Mobility consists of the company's consumer-focused smartphone and set-top box business, while Motorola Solutions focuses on handheld communication devices and public-safety radios.

The Dow Jones Industrial Average lost 4 points to 11666, one day after closing at a 28-month high.

The Nasdaq Composite edged down less than one point to 2691. The Standard & Poor's 500-stock index fell 0.2% to 1269.

Weighing on the S&P 500, food retailers lagged after BMO Capital Markets downgraded Safeway, Vitamin Shoppe, and Whole Foods to marketperform from outperform, noting limited upside. Shares of Safeway fell 4.6%, Vitamin Shoppe was off 3.4% and Whole Foods shed 2.9%. BMO also reduced its estimates for Supervalu, noting the chain's inability to drive traffic, and Kroger, saying the fiscal year 2011 consensus could be too high given the challenging environment. Supervalu tumbled 8.2, while Kroger lost 1.6%.

However, the market pared steeper earlier declines after the Commerce Department reported that U.S. factory goods orders unexpectedly rose in November 0.7%. Economists surveyed by Dow Jones Newswires had forecast a 0.1% decline.

Also helping to keep the market's losses in check, technology companies rose, led by a 2.8% climb in Advanced Micro Devices after the company said it is launching its new Fusion chip at the Consumer Electronics Show in Las Vegas. Rival Intel will be announcing a similar chip of its own at the show. Shares of Intel rose 1%.

Later in the session, traders will be focused on the wording of the U.S. Federal Reserve's minutes from its latest meeting, which will be released at 2 p.m. EST.

European stocks traded largely higher as the euro was boosted by data showing the U.K.'s manufacturing sector expanded at the fastest rate for more than 16 years in December. Also helping lift sentiment in Europe, Chinese Vice Premier Li Keqiang said China supports Spain's economic reforms and will continue buying Spanish government debt, the Chinese official wrote in an editorial in El Pais, a Spanish newspaper.