The S&P 500 broke a five-day streak of gains on Wednesday as investors found little reason to extend a rally that took the benchmark index to four-year highs.
While the major averages ended essentially flat, three stocks fell for every gainer on the New York Stock Exchange, a sign of investors pulling back from gains that have lifted numerous blue-chips to 52-week highs. Procter & Gamble
The S&P 500 hit an intraday high of 1,399.42, its highest level since early June 2008, before pulling back in the afternoon. The 1,400 level could act as a barrier to further gains.
Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio, noted that higher beta stocks - those that outperform broader averages - aren't holding up as well, which he said is often indicative of a market that is struggling to maintain momentum.
The Russell 2000 <.TOY> was down nearly 1 percent, notably.
Momentum continued in Apple Inc
The stock is up about 46 percent so far this year, leading some to call for a pullback in the largest U.S. company by market value.
We do worry that the move in Apple has been a little too much, too fast, as the fear is that as shares rise, expectations will get overly optimistic, said Channing Smith, co-portfolio manager of the Capital Advisors Growth Fund at Capital Advisors in Tulsa, Oklahoma.
The Dow Jones industrial average <.DJI> rose 16.42 points, or 0.12 percent, to 13,194.10 at the close. The Standard & Poor's 500 Index <.SPX> slipped 1.67 points, or 0.12 percent, to 1,394.28. The Nasdaq Composite Index <.IXIC> inched up just 0.85 of a point, or 0.03 percent, to 3,040.73.
Bank stocks, a major component of the S&P 500's 11 percent gain for the year, led a late-day surge in Tuesday's rally after JPMorgan Chase & Co
JPMorgan's news yesterday was so unexpected that it had a disproportionate effect on the market. We were looking for an excuse to move higher and we found it, McCain said.
The Fed said late Tuesday most of the largest U.S. banks passed their annual stress tests of capital strength in a report that underscored the financial sector's recovery, but called out a few that failed, including Citigroup Inc
The central bank also forecast moderate growth over coming quarters with the unemployment rate declining gradually versus the modest growth the central bank said it expected in January. The change in language, used in the Fed's statement after a one-day policymakers' meeting, was seen as a slight upgrade of the economic outlook.
Volume was about 7.45 billion shares on the New York Stock Exchange, the American Stock Exchange and Nasdaq, slightly below last year's daily average of 7.84 billion.
The increasing optimism about the U.S. economy helped lift the dollar to an 11-month high against the yen and a 1-month high versus the euro.
The greenback's advance alongside a strong equities market underscores investors' bet that the U.S. economic recovery is sustainable.
But online game maker Zynga Inc
(Editing by Jan Paschal)