Stocks finished mixed in lackluster trading Wednesday, with the Dow breaking a five-day winning streak, as investors digested a batch of bank earnings and amid ongoing concerns over the debt ceiling.
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Meanwhile, the Dow Transport index hit a new all-time high, surging more than 15 percent in the last two months. (Read More: 10 Stocks Driving Transports to Historic Highs)
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, closed near 13.
Among key S&P sectors, telecoms and materials slipped, while techs and energy gained.
"The fundamentals are coming in very strong, bank earnings are looking good and Apple's picking up today. But the fact that we're still not higher signals we're still in a bit of a consolidation phase and people are worried about the debt ceiling," said Carol Pepper, CEO of Pepper International.
Pepper remained bullish on the market expects equities to gain 15 to 20 percent gain this year.
"The first quarter is going to remain muted because of the debt ceiling problems, but the sunshine will eventually come out and people will start buying—fundamentals are great, companies are doing extremely well, earnings will continue to be positive and consumers are holding steady," she said.
Economic activity expanded at a moderate rate in January with consumer spending picking up, according to the Federal Reserve in its Beige Book report.
Meanwhile, the World Bank slashed its outlook for world growth to 2.4 percent in 2013, saying a slow recovery in developed nations is holding back the global economy.
Apple jumped above $500 a share despite a round cuts from analysts—Pacific Crest lowered its rating on the company to "sector perform" from "outperform." Stifel and BofA Merrill reduced their price target to $725 and$720, respectively. Apple is the worst performer on the Nasdaq 100 index year to date and has plunged more than 25 percent from its all-time high of $705 a share. (Read More: Apple Trades Near $500 as Investors Dump Shares)
Hewlett-Packard rallied after the IT company received interest from potential buyers for Autonomy and EDS, according to Dow Jones. But sources told CNBC that HP has no plans to sell any of its core assets including EDS and Autonomy.
Boeing slumped on worries about the safety of its Dreamliners. Late Tuesday, Japan's ANA 787 made an emergency landing due to a battery malfunction warning in the cockpit, adding to a string of problems that occurred last week. Goldman Sachs cut its rating on the Dow component to "buy" from "conviction buy."
Talks to take Dell private advanced with at least four major banks lined up to provide financing, according to Reuters. A deal for the computer software company could be announced in two weeks and the price will likely be between $13.5 a share and $14 a share, with an equity investment from Silver Lake and other investors of roughly $2 billion, CNBC learned.
Among earnings, Goldman Sachs rallied after the financial giant posted fourth-quarter earnings that nearly tripled, helped by gains in stock and bond values, increased M&A revenue and lower compensation expenses.
And JPMorgan Chase declined even after the largest U.S. bank beat earnings expectations, thanks to increased mortgage lending profit and a decline in costs for bad loans. Separately, the firm slashed CEO Jamie Dimon's bonus in half, citing the company's $6.2 billion "London Whale" trading loss last year. (Read More: Forget Earnings: What Wall Street's Really Watching)
Chipotle tumbled after the fast-casual restaurant chain said it expects higher food costs to dampen its earnings despite stronger-than-expected sales.
On the economic front, homebuilder sentiment remained unchanged in January after eight months of consecutive gains, but held at the highest level since April 2006, according to the NAHB's sentiment index. Homebuilders Toll Brothers and Pulte remained under pressure.
Despite big earnings gains from the big public builders, overall confidence among the nation's home builders took a pause in January. An industry index measuring sentiment was unchanged after eight consecutive monthly gains. The index was heading toward the line between positive and negative sentiment, but appears to have stalled.
Consumer prices were unchanged in December, according to the Labor Department, giving the Federal Reserve space to prop up the economy by staying on its easy monetary policy path. And industrial production gained 0.3 percent in December, thanks to a pick-up in automobile production, according to the Federal Reserve after a 1 percent gain in November.
Mortgage applications gained for a second week, according to the the Mortgage Bankers Association.
In Europe, the IMF approved a $4.3 billion loan tranche to Greece as expected, giving the official green light to the program. European shares closed flat.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
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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