Stocks ended mixed after moving between small gains and losses Tuesday, as investors kept their focus on developments in the euro zone and ahead of Alcoa's results, which marks the beginning of third-quarter earnings season.
The Dow Jones Industrial Average slipped 16.88 points, or 0.15 percent, to end at 11,416.30. Alcoa and Caterpillar led the blue-chip gainers, while AT&T slipped.
The S&P 500 eked out a gain of 0.65 points, or 0.05 percent, to close at 1,195.54. The Nasdaq gained 16.98 points, or 0.66 percent to finish at 2,583.03.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, was below 33.
Shortly after the market close, Slovakia's government lost a confidence vote and called on a plan to strengthen the euro zone's EFSF rescue fund, but the package was expected to go through in a later re-vote because the outgoing prime minister planned to ask for help from the opposition.
All 16 of the other euro zone countries have already ratified the plan to give more powers to the EFSF.
Stocks surged sharply in the previous session, with the Dow logging its best five-day point gain since Dec. 2008, amid optimism that France and Germany's pledge would help resolve the euro zone debt crisis and rescue the region's struggling financials. However, volume was relatively light with trading subdued due to Columbus Day.
“If they (euro zone leaders) don’t come up with something that has some form of a roadmap with credible muscle behind it in that period of time, then people are going to start building into their forecasts what up to now have been possibilities," John Haynes, head of research at Investec told CNBC. "They will become probabilities and the people in the real world, like CEOs, will start to plan against the possibility becoming a probability and will take precautionary measures."
Meanwhile, Greece will be receiving another lifeline next month from its international lenders in order to avoid bankruptcy. Inspectors from the Troika—EU, IMF and ECB—said an 8 billion euros loan tranche should be paid in early November.
Investors will be focusing on Alcoa, which kicks off third-quarter earnings season after the bell on Tuesday. The Dow component and aluminum producer is expected to post earnings of 22 cents a share, according to a Thomson Reuters poll.
PepsiCo , JPMorgan and Google are among other major earnings scheduled to report this week.
“The core earnings capacity of the US economy is still doing pretty well, but no one is going to not take the opportunity to mark to market the expectations for the fourth quarter and beyond,” said Haynes. “The third quarter is always a difficult quarter. Every year, this is the confessions season."
Citigroup said Goldman Sachs will likely post a loss of 65 cents a share in the third quarter versus a previous EPS view of 10 cents, due to weakness across trading and investment banking, market declines and wider credit spreads during the period.
Research In Motion gained after activist investor Jaguar Financial said holders of at least 8 percent of the BlackBerry maker's stock should back its call for a sale or a corporate shake-up at the struggling firm.
Dollar Thrifty slipped after the car rental company said it will continue as a stand-alone firmafter it failed to get a final takeover proposal from Hertz Global
Meanwhile, 99 Cents Only Stores rallied after the retailer
Treasury prices held their lossesafter the government auctioned $32 billion in 3-year notes at a high yield of 0.544 percent and a bid-to-cover of 3.30.
On the economic front, small businesses grew slightly more confident in September for the first time in seven monthsas their sales outlook improved, according to the National Federation of Independent Business.
Meanwhile, the minutes of Federal Open Market, which were scheduled to be released this afternoon has been delayed to Wednesday at 2pm ET due to the fact that the most recent meeting was changed from 1-day to 2-days.
—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC—
On Tap This Week:
WEDNESDAY: Weekly mortgage apps, 10-yr note auction, FOMC Minutes, Fed's Plosser speaks, Fed's Pianalto speaks, Oracle shareholders mtg; Earnings from PepsiCo
THURSDAY: International trade, jobless claims, oil inventories, 30-yr bond auction, Fed's Kocherlakota speaks; Earnings from JPMorgan, Google
FRIDAY: Retail sales, import/export sales, consumer sentiment, business inventories, new iPhones available; Earnings from Mattel
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