U.S. Stocks Flatten After Early Rally on Extended Tax Cuts

U.S. stocks gave back a large market rally late in the session on Tuesday, due to reports that the insider trading probe will widen and President Obama announced he will work to overhaul taxes in two years.

After getting off to an 89 point rally on Tuesday, the Dow Jones Industrial Average lost 3.03 points to close at 11,359.16. The S&) 500 pulled back from two-year intra-day highs to close up just a fraction to 1,223.78.

The major losers on the DJIA wer 3M Co. (NYSE: MMM), Hewlett-Packard Co. (NYSE: HPQ) and JPMorgan Chase & Co. (NYSE: JPM), all closing down at least 1.5 percent on Tuesday.

Gains earlier in the session came after Obama agreed to extend tax cuts and the treasury sold the remaining shares it held in Citigroup Inc. (NYSE: C).

After a report showed that the government authorities had issued at least a dozen subpoenas to hedge funds and in investment firms as a result of the Fed's investigation into insider trading.

Also on Tuesday, the yield on the 10-year Treasury note climbed to 3.14 percent, the highest since June 22.

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