US stocks end May on low note

The last trading day of the month was flat, but the major indexes all were higher in May, with the Nasdaq up 3.6 per cent.

NEW YORK (AFP) - US stocks closed mostly lower on Tuesday, ending the month on a cautious note as investors weighed economic news with prospects for a Federal Reserve interest rate increase in two weeks.

Despite a dip in consumer confidence, the day's batch of data was mostly encouraging about the state of the economy, from rising home prices to a sharp jump last month in consumer spending, the main driver of growth.

The Fed has signaled a rate hike could be possible at its June 14-15 meeting, though markets are betting the central bank will wait until the July meeting.

At the closing bell, the Dow Jones Industrial Average was down 88.69 points (0.50 per cent) at 17,784.53.

The broad-market S&P 500 slipped 2.17 (0.10 per cent) to 2,096.89, while the tech-rich Nasdaq Composite rose 14.55 (0.29 per cent) to 4,948.05.

The better-than-expected April consumer spending numbers set the bar for the second-quarter consumption data, said Chris Low at FTN Financial.

"It's now looking really good," he said.