"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
due to weak demand. Earlier, shares briefly dipped below $500, a level the company hasn't traded below since last February.
Apple Trades Near $500 as Investors Dump Shares
Shares of iPhone component makers also declined, including Cirrus Logic and Qualcomm.
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.