Stocks stalled on Wednesday as technical measures suggested a five-month rally was growing long in the tooth.
Investors were reluctant to make big bets even though a report showed U.S. private employers added more jobs than expected in January.
The S&P 500 started to look overbought again after reaching 2 1/2-year highs on Tuesday. A key measure of the rally's strength suggests stocks are vulnerable to a correction, analysts said.
The PHLX Semiconductor Index <.SOX> was running into resistance around 450 after back-to-back closes above that level for the first time since November 2007. Chips are considered a leading indicator for the broader market.
If the market looks like it's ready for a 5 percent or more correction, what's one of the sectors at the top of my list to be out of? For sure it's the semiconductors, said Vinny Catalano, chief investment strategist at Blue Marble Research in New York.
The Dow closed on Tuesday above the milestone 12,000 level for the first time since June 2008, and the S&P closed above the 1,300 level for the first time since August 2008.
Investors on Wednesday kept an eye on protests in Egypt as violent street clashes erupted. Concerns that protests could spread to other countries in the region have pressured equities in recent sessions.
The Market Vectors Egypt Index ETF , which consists of shares of companies in Egypt, fell 3.7 percent after rising for two consecutive days.
The Dow Jones industrial average <.DJI> rose 1.81 points, or 0.02 percent, at 12,041.97. The Standard & Poor's 500 Index <.SPX> was down 3.56 points, or 0.27 percent, at 1,304.03. The Nasdaq Composite Index <.IXIC> was down 1.63 points, or 0.06 percent, at 2,749.56.
Joseph Hargett, a strategist at Schaeffer's Investment Research, said the Dow needs to stay above 12,000 firmly as a show of short-term support. The resistance now resides in the 12,100-12,200 area.
After a pullback late last week, the S&P 500 has started to look overbought by some measures. The index is more than one standard deviation above its 50-day moving average and the weekly relative strength index is above 70.
Trading volumes were not seriously affected by a harsh winter storm that brought parts of the U.S. Midwest to a standstill.
The story was different for futures traders in Chicago, which took much of the brunt of the storm.
It's definitely light downtown here. Pit trading opened late too. ... We're about half-staffed, said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago, where over 20 inches of snow had fallen.
Volume on the NYSE, Amex and Nasdaq reached 7.26 billion shares compared to last year's daily average of about 8.47 billion.
Overall U.S.-listed option volume approaching the close was about 15.3 million contracts, slightly below the recent average daily volume, according to option analytics firm Trade Alert.
The PHLX semiconductor index closed up 0.5 percent at 453.91. The 450 area coincides with the 23.6 percent retracement of the slide from the index's historic highs in 2000 to the low hit in November 2008.
The 23.6 percent retracement has been a breaking point in the index's trading at least five times in the past decade.
Appliance maker Whirlpool Corp dropped 2.1 percent to $83.60 after its profit missed estimates.
Time Warner Inc and Mattel Inc rallied after both companies reported stronger-than-expected quarterly profits. Media group Time Warner gained 8.6 percent to $35.10 while toymaker Mattel was up 0.9 percent to $24.37.
(Reporting by Edward Krudy; Additional reporting by Rodrigo Campos; Editing by Kenneth Barry)