Stocks fluctuated around break-even on Wednesday as investors waited for Greece to accept tough reforms in exchange for a new bailout, but underlying confidence kept the Dow near its almost four-year high notched on Tuesday.

Greek party leaders finally gathered on Wednesday to agree to reforms demanded by the European Union and International Monetary Fund after delays that seemed to have been caused by procedural matters.

European Central Bank policymakers were still divided on what contribution the bank could make to a restructuring of Greece's sovereign debt, sources said. The ECB has ruled out joining private creditors in voluntarily accepting a reduction in the value of the Greek bonds it holds, but could come up with an alternative method.

It is going to be a drawn-out process like it has been, but the market has been looking beyond that, said Tim Ghriskey, investment officer of Solaris Asset Management in Bedford Hills, New York.

The Dow Jones industrial average dropped 17.33 points, or 0.13 percent, to 12,860.87. The Standard & Poor's 500 Index fell 0.37 points, or 0.03 percent, to 1,346.68. The Nasdaq Composite Index gained 1.82 points, or 0.06 percent, to 2,905.90.

Energy shares were the biggest decliners, as Brent and U.S. crude oil futures pared gains after a report showed a build-up in U.S. crude inventories. The S&P energy index fell 0.7 percent. Exxon Mobil Corp was the biggest drag on the Dow, falling 1.2 percent to $84.87.

The Dow closed Tuesday at its highest level since May 2008 as stocks rallied from late last year on central bank action and signs of an improving economy.

The Dow has gained 21 percent since early October and has retraced over 80 percent of its bear market slide from 2007 to early 2009. The blue-chip index is now about 10 percent away from the all-time high it hit in October 2007.

New highs bode well for future performance, technical analysts at Instinet in New York said in a research note. From an intermediate perspective a new high would be a positive for the index.

High-profile Wall Streeters raised eyebrows with their endorsement of stocks.

Laurence D. Fink, chief executive of BlackRock, the world's largest money manager, told Bloomberg Television that investors should be 100 percent in stocks.

That followed bullish comments from the staff of renowned market bear Nouriel Roubini. Gina Sanchez, Roubini's director of equity and allocation strategy, told CNBC that the rally has some legs.

Any day when you a number of pundits come out and say you should own stocks, a lot of people say 'Oh, time to sell', especially after the market's had a big move, said Ghriskey.

Walt Disney Co rose nearly 1 percent to $41.32 and was a top boost to the Dow a day after it reported quarterly profit that grew more than expected.

Polo Ralph Lauren Corp surged nearly 9 percent to $171.14 after the clothing maker reported better-than-expected results for the holiday quarter and raised its margin forecast.

Ingersoll-Rand Plc, the maker of Schlage locks and Trane air conditioners, climbed 2 percent to $38.30 after quarterly results topped estimates, although sales fell.

Of the 315 companies in the S&P 500 that have reported earnings to date, 61.0 percent have come in above analysts' expectations.

McDonald's Corp shed 0.7 percent to $100.24 after its January sales rose more than expected at established restaurants across the globe, with strength in the United States helping to offset slowing sales growth in Europe.

Rambus Inc advanced 9 percent to $8.23 after the company reached a patent license agreement with Nvidia Corp and the companies settled all outstanding claims. Nvidia shares rose 4.1 percent to $16.38.

(Reporting By Edward Krudy; Editing by Leslie Adler)