NEW YORK — Investors might be worried about the soundness of the market's rally, but they're also worried about missing it.
Stocks reversed steep losses in the final hour of trading Monday to end little changed. The Dow Jones Industrial average recovered from a 130-point slide to end up a little more than 1 point.
The day offered little economic and corporate news to guide investors. Add in light trading volume, and traders said the mix was right for volatility.
Stephen Carl, head of equity trading at The Williams Capital Group in New York, said the light volume made the market susceptible to quick changes in direction. With fewer players in the market it takes little to nudge stocks from one direction to the other.
"On light volume they're just kind of looking for anything," he said, referring to traders seeking signals about which way to trade.
Volume picked up somewhat in the final hour and investors moved into stocks of financial companies and retailers.
Falling commodities prices had spooked investors earlier Monday, but prices for key industrial materials closed off their lows for the day, providing some relief to the stock market.
Commodities prices have been rallying in recent weeks on optimism that a pickup in manufacturing would increase demand for raw materials like copper, silver and oil. The recovery in both stock and commodity prices late Monday suggested that investors have not given up on hopes for a turnaround in the economy.
Traders said the market is still trying to determine whether to proceed with a powerful three-month rally.
"There's a growing sense of confusion as to when exactly this decline in the economy will end and what kind of expansion will come on the heels of it," said Joseph Battipaglia, market strategist for the private client group at Stifel Nicolaus & Co.
The Dow rose 1.36, or less than 0.1 percent, to 8,764.49. The Standard & Poor's 500 index slipped 0.95, or 0.1 percent, to 939.14, and the Nasdaq composite index fell 7.02, or 0.4 percent, to 1,842.40.
Like stocks, commodities have been rallying on expectations of an economic recovery. Demand for commodities would likely increase as the economy strengthens.
Monday's pullback in commodities prices was also due in part to strength in the dollar, which can hurt demand for raw materials by making them more expensive.
Light, sweet crude fell 35 cents to settle at $68.09 per barrel on the New York Mercantile Exchange.
Investors were also cautious ahead of the latest report card on banks. The government is expected to announce this week which banks will be allowed to return bailout funds. JPMorgan Chase, Goldman Sachs and American Express are expected to get approval to repay their loans, The Washington Post reported.
Major European markets fell. Britain's FTSE 100 fell 0.8 percent, Germany's DAX index slid 1.4 percent, and France's CAC-40 dropped 1.5 percent. In Asia, Japan's Nikkei stock average finished with a gain of 1 percent.