U.S. stocks turned mostly negative on Monday, with the S&P 500 and Dow industrials retreating from record highs, after activist investor Carl Icahn said he is "very cautious" on equities.
"It's pretty much Icahn and the benefits of Twitter" that deflated the market, said Art Cashin, director of floor operations at UBS, referring to tweets of Icahn's comments made at a Reuters summit Monday afternoon.
Speaking at the Reuters Global Investment Outlook Summit, Icahn said he could see a 'big drop" in stocks because earnings at many companies are driving more by low borrowing costs rather than strong management.
After clearing 16,000 for the first time, the Dow Jones Industrial Average rose to an intraday record of 16,030.28, before falling below the psychologically important level late in the session. It ended at 15,976.02, its fourth consecutive closing high, up 14.32 points, or 0.1 percent.
Boeing led blue-chip companies on the rise, after the plane maker received more than 250 orders for its revamped 777 jet at an airshow in Dubai.
The S&P 500 also surpassed a psychological hurdle, rising above 1,800 for the first time, before clearing gains to finish down 6.65 points, or 0.4 percent, at 1,791.53. It had set an intraday record of 1,802.37.
Underlying gains that took the Dow above 16,000 for the first time and the S&P 500 above 1,800 is ongoing optimistic about stimulus from the Fed.
"The market is very Fed oriented," said Paul Nolte, managing director at Dearborn Partners.
Benchmark indices initially trimmed an early rise after the release of the National Association of Home Builders/Well Fargo Housing Market Index, which found home builder confidence to be flat this month from a downwardly revised level of 54 the prior month.
"Every question gets answered with what does this mean to the Fed? The builders confidence falling below forecasts means the Fed is going to stay in the market," said Nolte, downplaying the survey's impact.
"Although the stock market does not appear to have the typical 'bubble' characteristics of ultra-high valuation levels seen in 2000 and 2007 or the rapidly rising interest rates and slowing money supply conditions of those years, it does appear extended from a near-term technical perspective and ripe for a modest near-term pullback," Fred Dickson, chief investment strategist at Davidson Companies, wrote in emailed commentary.
The Nasdaq struggled on either side of unchanged, after coming within half a dozen points of 4,000. It lost 36.9 points, or 0.9 percent, to 3,949.07.
Underlying gains that took the Dow above 16,000 for the first time and the S&P 500 above 1,800 is ongoing optimistic about stimulus from the Fed. "The market is very Fed oriented," said Paul Nolte, managing director at Dearborn Partners.
The dollar fell against global counterparts and the yield on the 10-year Treasury note used in figuring mortgage rates and other consumer loans fell 4 basis points to 2.67 percent.
Crude-oil futures turned lower, falling 8` cents, or 0.9 percent to $93.03 a barrel; gold futures fell $15.10, or 1.2 percent, to $1,272.30 an ounce.
In prepared remarks, New York Federal Reserve president William Dudley said economic fundamentals are improving, and that there is a sound case to be made that the pace of growth, while disappointing in 2013, should pick up some next year.
Speaking at a conference in Philadelphia, Philly Fed President Charles Plosser suggested the central bank should communicate the amount of assets it intends to purchase and start phasing out the program known as quantitative easing.
At a conference Monday in the United Arab Emirates, Boston Federal Reserve President Eric Rosengren told reporters capital ratios have improved in the United States, with bank lending on the rise to households and corporations.
Stocks in China climbed after the government vowed to ease its one-child policy and increase private investment as part of a package of economic reports.
—By CNBC's Kate Gibson
Coming Up This Week:
Monday: Minneapolis Fed President Narayana Kocherkakota at 7:45 p.m. Eastern. Earnings after the close include Salesforce.com, Jacobs Engineering Group and Urban Outfitters.
Tuesday: Earnings from Home Depot, Medtronic, Best Buy, Campbell Soup, Dick's Sporting Goods, TJX, Trina Solar, Valspar, La-Z-Boy. Employment cost index at 8:30 a.m. Eastern, Chicago Fed President Charles Evans speaks at 2:15 p.m. Eastern; Fed Chairman Ben Bernanke speaks at the annual National Association of Business Economists dinner at 7 p.m. Eastern.
Wednesday: Earnings ahead of the open include ADT, Deere & Co., J.C. Penney, Lowe's Cos, JM Smucker and Staples. L Brands is expected after the close. Economic reports include October retail sales at 8:30 a.m. Eastern, October CPI at 8:30 a.m. Eastern, business inventories at 10 a.m. Eastern, existing home sales for October at 10 a.m. Eastern, and minutes from the Federal Reserve's last meeting, at 2 p.m. Eastern.
Thursday: Earnings ahead of the open include: Abercrombie & Fitch, Gamestop, Patterson and Target. After the close, earnings are expected from Autodesk, Gap, Intuit, Ross Stores and Dollar Tree. Economic reports include weekly jobless claims at 8:30 a.m. Eastern, producer price index for October at 8:30 a.m. Eastern, and the Philly Fed at 10 a.m. Eastern.
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