* Supervalu, Safeway slip after downgrades
* Materials, energy shares fall with oil, metals prices
* Volume keeps pace after active Monday
* Dow up 0.2 pct, S&P off 0.2 pct, Nasdaq off 0.4 pct
* For up-to-the-minute market news see [STXNEWS/US] (Updates to late afternoon, changes byline)
By Leah Schnurr
NEW YORK, Jan 4 (Reuters) - U.S. stocks eased on Tuesday as a selloff in commodity prices hit resource shares, while concern about lower supermarket profits battered consumer stocks.
Shares of Supervalu Inc
The S&P materials index <.GSPM> slipped 0.9 percent, as did the energy index <.GSPE> as investors took profit in the commodities space. Materials and energy were among top-performing sectors in 2010.
The S&P and Nasdaq pared losses modestly and the Dow edged higher following minutes from the Federal Reserve's December policy meeting that showed officials felt the U.S. economic recovery was still weak enough to warrant monetary support despite growing signs of strength. For details, see [ID:nWAL4CE7W1]
The market was supported by strength in defensive shares, including the utilities and telecom sectors.
"The S&P is pretty buoyant because of the fact that there seems to be a little bit of a renewed interest in the market," said Nick Kalivas, senior equity index analyst at MF Global in Chicago.
"I think it's subtle but I do think it's present. How long it lasts is obviously the million dollar question."
The Dow Jones industrial average <.DJI> added 17.75 points, or 0.15 percent, to 11,688.50. The Standard & Poor's 500 Index <.SPX> was off 3.07 points, or 0.24 percent, to 1,268.80. The Nasdaq Composite Index <.IXIC> slipped 9.71 points, or 0.36 percent, to 2,681.81.
The market's weakness followed a strong start to the new year on Monday as investors pushed new money into the market. The Dow and S&P 500 recently hit two-year highs as economic data pointed to solid U.S. recovery.
While many analysts see another year of gains for the S&P 500, Morgan Stanley offered a more contrarian view, forecasting a year-end target for the S&P 500 below 2010's close.
Monday's move was accompanied by a rise in volume, with more than 7.7 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq -- above the 50-day moving average. The pace held strong for a second day, with 3.27 billion shares traded near midday.
Shares of Supervalu dropped 5.9 percent to $9.04, while Safeway was down 3.5 percent at $21.71, and Whole Foods fell 3.6 percent to $48.91. (Editing by Chizu Nomiyama)