Stocks ended largely unchanged after crawling along the flatline for most of the session Monday, weighed by worries over demand for Apple's iPhone 5 and as investors sat on the sidelines ahead of a busy week of corporate earnings.
(Read More: After-Hours Buzz: LULU, DELL & More)
Investors also hesitated to jump in ahead of Fed Chairman Ben Bernanke's remarks at 4 pm ET, his first speech since the Fed's meeting minutes indicated that some policymakers wanted to end the bond buying program before year end. (CNBC.com will stream this event live.)
The Dow Jones Industrial Average rose 18.89 points, or 0.14 percent, to end at 13,507.32, led by Hewlett-Packard.
The S&P 500 erased 1.37 points, or 0.09 percent, to close at 1,470.68. The Nasdaq slipped 8.13 points, or 0.26 percent, to finish at 3,117.50. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, closed above 13.
Among key S&P sectors, health care rose, while telecoms slipped.
"The S&P is still having trouble taking out 1,474," wrote Elliot Spar, market strategist at Stifel Nicolaus. "If it does, it brings out all the technical wannabes. However, the fact remains that it will not be confirmed by the DJIA, Nasdaq Comp and the NDX. Thus, you should consider selective profit-taking and hedging now."
Dell surged nearly 13 percent amid chatter that the computer hardware company is in talks with private equity firms over a potential buyout. However, Dell declined to comment to CNBC on what it called "rumors or speculation."
Apple fell more than 3 percent to close near $500 a share after Japan's Nikkei and the Wall Street Journal reported that the company cut orders for parts on its iPhone 5 due to weak demand. Earlier, shares briefly dipped below $500, a level the company hasn't traded below since last February.
(Read More: Apple Trades Near $500 as Investors Dump Shares)
Meanwhile, UBS and several other firms noted that the report of order cuts at Apple appears to be old news from a notification to suppliers last month.
"We think it's old news," said Peter Misek, senior tech analyst at Jefferies. "[The iPhone 5] is selling well, but not as well as hoped…it's still the biggest-selling device of all time at 50 million units, but there were hopes that it would be better than that."
President Barack Obama warned Congress that it must raise the debt ceiling or risk a "self-inflicted wound on the economy." He threatened to take over authority for raising the borrowing limit if Republicans decline.
"We've got to stop lurching from crisis to crisis to crisis," Obama told reporters at the White House.
Fourth-quarter earnings will kick off in earnest later this week when most major banks including Goldman Sachs, JP Morgan Chase and Bank of America will report results. (Read More: Bank Earnings: What to Watch For)
Among techs, Hewlett-Packard jumped after after JPMorgan upgraded its rating on the tech stock to "neutral" from "underweight" and raised its price target to $21 from $15.
Cisco Systems rose after R.W. Baird boosted the company to "outperform" from "neutral," saying the company is executing very well in a challenging macroeconomic environment.
And Facebook reversed its gains to close lower even after Deutsche Bank lifted its rating on the social-networking giant to "buy" from "hold," saying mobile newsfeed ads are providing the company with more revenue momentum than any other firms the brokerage covers. The company is expected to hold an event at its headquarters Tuesday.
Meanwhile, Research In Motion soared ahead of the introduction of its BlackBerry 10 later this month. Shares have skyrocketed nearly 40 percent in the last three weeks.
Atlanta Fed president Dennis Lockhart said that the Federal Reserve's unconventional monetary policy has limits, and could pose a risk to "market functioning and financial stability." And San Francisco Fed President John Williams suggested that the rise of uncertainty is constraining economic activity.
Chicago Fed President Charles Evans gave an upbeat outlook for the economy in 2013. Evans forecast the U.S. will grow by 2.5 percent in 2013 and 3.5 percent in 2014. The speech was his first since mid-2011 in which he did not make an explicit call for further monetary easing. Evans was less sanguine on unemployment however, forecasting a rate of 7.4 percent in 2013, easing slightly to 7 percent in 2014.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
TUESDAY: PPI, retail sales, Empire state mfg survey, Fed's Rosengren speaks, Fed's Kocherlakota speaks, business inventories, Fed's Plosser speaks, credit card default rates reported, Facebook event; Earnings from Lennar
WEDNESDAY: Weekly mortgage applications, CPI, Treasury int'l capital, industrial production, housing market index, Fed's Kocherlakota speaks, oil inventories, Beige Book, Fed's Fisher speaks, OPEC's monthly market report; Earnings from Goldman Sachs, JPMorgan, Bank of NY Mellon, Ebay
THURSDAY: Housing starts, jobless claims, Philadelphia Fed survey, natural gas inventories, Fed's Lockhart speaks, Fed balance sheet, money supply; Earnings from Bank of America, Citigroup, UnitedHealth, BB&T, BlackRock, American Express, Intel, Capital One
FRIDAY: General Electric, Schlumberger, Morgan Stanley
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