Despite an unexpected drop in consumer confidence, the S&P 500 ended January up 4.3 percent, its best finish since 1997.

The DOW fell 0.2% on Tuesday, shedding 20.81 points to close at 12,632.91. The Nasdaq closed the day up 0.1%, adding 2.08 points, ending at 2814.02. The S&P 500 was nearly flat, falling 0.60 points, closing the day at 1312.40.

Consumer confidence fell unexpectedly to 61.1 in January, down from a 64.8 reading in December and below the 68 economists had been expecting. The drop is attributed to investors worrying that Portugal may need a similar deal as Greece with its private creditors.

The housing market continues to struggle as home prices fell in November for a third straight month in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The largest declines were in Chicago, Detroit and Atlanta.

Treasury yields continue to fall after the Federal Reserve announced last week it expected to keep interest rates near zero into late 2014. The yield on the 10-year Treasury fell to its lowest closing level in nearly four months, while the yield on the five-year Treasury note fell to a new record low at 0.71 percent.

In corporate news, Radio Shack's (RSH) stock fell 28 percent after an earnings miss of less than half of what Wall Street was expecting. Best Buy Co. (BBY) fell over 5 percent as demand for buying cell phones has softened at their stores.

The remainder of the week will be busy on both the economic front and earnings calendar. We will see productivity numbers, factory orders and the January employment report. Earnings will be announced from companies such as Aetna, Qualcomm, Merck and Clorox.