Stocks closed mixed but finished off their worst levels Tuesday after a report that EU officials may be creating two separate rescue fundsto help contain the region's ongoing sovereign debt crisis.
The Dow Jones Industrial Average added 52.30 points, or 0.43 percent, to finish at 12,150.13 , led by Pfizer and GE .
The S&P 500 eked out a gain of 1.39 points, or 0.11 percent, to end at 1,258.47, failing to finish above the crucial 1,260 level. Meanwhile, the Nasdaq slipped 6.20 points, or 0.23 percent, to close at 2,649.56, snapping a four-day winning streak.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 28.
Most S&P sectors still ended in positive territory, led by materials.
“Without compelling positive news, [the market] is running out of gas…we need some reassurance if not positive surprise to drive us significantly higher,” said Bruce McCain, chief investment strategist at Key Private Bank."
Without any significant economic news, investors continued to focus on developments in the euro zone.
Negotiators are considering allowing the euro zone’s current 400-billion bailout fund to continue running when a new 500 billion euro facility—known as the European Stability Mechanism (ESM)—comes into force in mid-2012, according to a report from the Financial Times.
And in its latest move, Standard & Poor's said it is considering downgrading the EFSF. This comes after S&P placed the ratings of 15 out of 17 euro zone countries on credit watch negative—including those of top-rated Germany and France. The remaining two members, Portugal and Greece, have already had their credit ratings downgraded to junk.