Stocks trimmed earlier losses in the last half hour of trading Thursday as investors considered a mixed batch of earnings and the Fed's next steps to stimulate the economy.
The Dow Jones Industrial Average was down about 10 points, after trading lower much of the session, a day after closing lowerfollowing news the Federal Reserve may not provide as much stimulus to the economy as had been expected.
3M, Caterpillar and Bank of America fell, while Pfizer and American Express rose.
The S&P 500 and the Nasdaq rose slightly. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 21.
More of the key S&P sectors were higher, led by health care, telecom and consumer discretionary. Industrials fell.
Traders have expected stocks to largely hold steady ahead of the Fed's policy setting meeting next week.
Market participants had been expecting the Fed to buy anywhere from $500 billion to $1 trillion in long-term assets, in a strategy known as quantitative easing. But there has been much speculation over the past two weeks on the size and scope of the Fed's plans.
Meanwhile, if the Fed decides to buy fewer than $500 billion, stocks would be likely to sell off, said Marc Pado, market strategist at Cantor Fitzgerald.
"The dollar would rally, and that would reverse what we’ve seen here lately," he said.
Not even a falling dollar could provide support for the market on Thursday, however. The dollar fell against a basket of currencies, after rising the past two days following a note from Goldman Sachs that said the currency will need to drop by "a lot more" than the Fed thinks in order to meet the central bank's inflation target. Meanwhile, gold rose above $1,330 an ounce.
A spate of earnings Thursday morning delivered mixed news to the markets. However, with about half of S&P 500 companies reporting so far, 85 percent have matched or beaten estimates, according to Thomson Reuters.
3M sank nearly 7 percent afterthe multinational conglomerate released a disappointing outlook, despite reporting results that beat expectations.
Halliburton shares were hit after a report indicating cement used by energy services company may have contributed to the BP oil spill disaster, and that the company had test results showing the cement was unstable. Documents obtained by a presidential commission investigating the spill said there was no evidence the contractor had alerted BP .
Shares of Dow component ExxonMobil rose after the energy giant reported strong profits, but revenues that fell short of expectations. Earlier, Royal Dutch Shell beat analyst forecasts with an 18 percent jump in third-quarter profit, sending the oil giant's shares higher.
Meanwhile, the price of oil closed above $82 a barrel, giving a boost to Chevron, although ConocoPhillips slipped. Chevron is expected to report earnings Friday morning.Shares of Dow Chemical slipped even after the largest U.S. chemical maker posted a better-than-expected quarterly profit helped by strong sales of chlorine, basic plastic, and lubricants.