Stocks regained their footing in choppy trading Wednesday, with the Dow and S&P 500 closing at a fresh high, but a sharp decline in Apple kept a lid on the Nasdaq's gains.
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The Dow Jones Industrial Average climbed 60.44 points to end at 15,275.69, led by American Express and JPMorgan.
The S&P 500 advanced 8.44 point to close at 1,658.78. Both the Dow and S&P 500 closed at new record highs, for the 20th and 15th time this year, respectively. The Nasdaq rose 9.01 points to finish at 3,471.62.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.
Among key S&P sectors, energy led the laggards, while consumer staples climbed.
"The market's been defying gravity a bit—apart from the housing report, the rest of the data was relatively negative today," said Art Hogan, managing director at Lazard Capital Markets. "Stocks are also in new unchartered territory."
Google announced that it is launching its own subscription music service called All Access and will launch in the U.S. for $9.99 after a free 30-day trial. Shares crossed above $900 a share for the first time. The search-engine giant has rallied more than 27 percent year-to-date. Meanwhile, music-streaming service Pandora traded in negative territory following Google's announcement.
Also among techs, Apple slumped near $425 a share after Julian Robertson's Tiger Management dumped the rest of its stake in the iPhone maker, according to an SEC filing. Tiger Management hadheld 42,125 Apple shares at the end of 2012. In addition, David Tepper of Appaloosa Management cut his Apple stake by about 40 percent.
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"Economic data's not been too great today but overall, it's a light news day," said Joe Bell, senior equity analyst at Schaeffer's Investment Research. "But the momentum's been strong so far and it seems to be a continuation of money flowing from the sidelines—a lot of people didn't participate in this rally."
Bell said based on short interest, investors are being cautious and continuing to bet on a market decline.
"If you look at the short interest, it's higher than it was in 2011," Bell noted. "And as people brace for a pullback, [the market] continues to churn higher. This is a classic case of 'climbing the wall of worry.'"
On the economic front, manufacturing activity in the New York region contracted unexpectedly in April for the first time since January. Adding to negative sentiment, industrial production declined in April, after an increase in the prior month, according to the Federal Reserve. And industry capacity utilization, a measure of how fully firms are deploying their resources, dropped sharply.
Meanwhile, producer prices posted their biggest drop in three years in April, as gasoline and food costs tumbled, according to the Labor Department.
Home builders' confidence rose in May, edging past expectations, with sales expectations rising to the highest level in more than five years, according to the National Association of Home Builders. But homebuilders traded lower, reversing their initial gains.
Shares in Europe and Asia eked out small gains as markets took a break from the global risk-on rally, but the Japanese Nikkei 225 rose over 2 percent to close above 15,000 for the first time since 2008.
"That equity market adage, sell in May and go away, is not so much misleading as it is misdirected," Vishu Varathan of Mizuho Corporate Bank said in a report. "For May, the S&P 500 is up 3.3 percent, the Euro Stoxx over 3 percent and the Nikkei 6.5 percent. So anyone who had sold and gone away would be smarting right now."
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Deere topped earnings and revenue expectations and forecast a record profit for the full year, but the farm equipment maker slumped after it said it was cautious because of weakness in the construction market.
Cisco is slated to post earnings after the closing bell.
So far, more than 90 percent of S&P 500 companies have posted quarterly results, with 67 percent topping earnings expectations and 24 percent missing forecasts, according to Reuters. If all remaining companies post numbers in line with estimates, earnings will be up 5.3 percent on last year.
However, sales numbers have come in 1 percent below estimates on average, with only 46 percent of companies beating their revenue projections.
Weekly mortgage applications declined for the first time in more than a month last week as interest rates jumped, according to the Mortgage Bankers Association.
—By CNBC's JeeYeon Park. Follow JeeYeon on Twitter: @JeeYeonParkCNBC
Coming Up This Week:
THURSDAY: CPI, housing starts, jobless claims, Philadelphia Fed survey, natural gas inventories, Fed balance sheet/money supply, Comcast shareholder mtg, Hess annual mtg, Intel shareholder mtg, Tiffany shareholder mtg; Earnings from Wal-Mart, Kohl's, Dell, Applied Materials, Autodesk, Marvell Tech, Nordstrom, JCPenney
FRIDAY: Consumer sentiment, leading indicators, Chipotle shareholder mtg, Icahn/Transocean shareholder mtg, JCPenney annual mtg
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