U.S. stocks slipped on Tuesday as investors paused to assess the rally that pushed the Dow industrials to a 13-month high in the previous session and drove the S&P 500 up for six straight days.

Throughout the morning, the three major stock indexes flicked in and out of negative territory in choppy trading on light volume. Defensive sectors, such as healthcare and consumer staples, performed better as investors refrained from the more aggressive buying strategies that have driven cyclical areas of the market in recent days.

But there were signs that some investors were buying on dips, a strategy used since the major U.S. stock indexes began their climb from the lows of early March. The S&P 500 is up 61 percent from its 12-year closing low set on March 9.

There's a lot of conflicting signals as to whether we get a sharp year-end rally with money pouring in from investors who have missed the bulk of the current rally or whether we start to see profit-taking as we see investors look ahead to a potential jobless recovery in 2010, said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut

The Dow Jones industrial average <.DJI> slipped 6.35 points, or 0.06 percent, to 10,220.59. The Standard & Poor's 500 Index <.SPX> dropped 2.67 points, or 0.24 percent, to 1,090.41. The Nasdaq Composite Index <.IXIC> lost 7.59 points, or 0.35 percent, to 2,146.47.

On Monday, the blue-chip Dow average climbed more than 200 points to close at 10,226.94, its highest level in 13 months. The rally was driven by signs that world leaders would leave stimulus measures in place to help the global economy until recovery from last year's market meltdown was certain.

Consumer staples, utilities and healthcare sectors stayed in positive territory as investors bought stocks perceived to be safer holdings in uncertain times, such as Johnson & Johnson , up 0.8 percent at $61.26, and Coca-Cola Co , up 1 percent at $56.05. Both are Dow components.

Cyclical stocks such as those in commodity-related companies, which investors pile into when feeling bullish about the economy, gave up some of Monday's gains.

The aluminum giant Alcoa Inc fell 0.5 percent to $13.28. The Dow Jones U.S. industrial metals and mining index <.DJUSIM> fell 1.2 percent.

In corporate news, American International Group rose 4.3 percent to $37.73 after ratings agency Moody's Investors Service said the insurer probably will be able to repay the government's loan and much of its preferred equity stake.

(Reporting by Edward Krudy; Editing by Jan Paschal)

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