The Dow eked out a gain for the eighth-consecutive session to post another closing high at 14,450.06 Tuesday. Meanwhile, the S&P 500 snapped a seven-day winning streak, dragged by financials and techs, logging its first drop in the month of March.
(Read More: After-Hours Buzz: BA, URBN & More)
Major U.S. Indexes
The Dow Jones Industrial Average eked out a gain of 2.77 points to close at 14,450.06, led by Merck, while Caterpillar and Bank of America sagged. The blue-chip index has been up for nine-straight Tuesdays.
The erased 3.74 points to finish at 1,552.48. The Nasdaq slid 10.55 points to finish at 3,242.32.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped above 12.
(Read More: )
Among key S&P sectors, techs and financials declined, while telecoms held small gains.
"We've had a nice steady trend and equities are in the midst of a long-term secular bull market," said Mark Martiak, senior wealth strategist at Premier/First Allied Securities. "But a pullback would make the markets and investors feel more comfortable…And any pullback would be a buying opportunity."
(Read More: I'm Not Confident About US Markets: Goldman's O'Neill)
But Thomas Lee, chief U.S. equity strategist at JPMorgan, said U.S. stocks are positioned for a pullback of up to 5 percent.
"There's a chance for the market to consolidate in the short-term," Lee said. "Flat would be a good outcome and I think a 5 percent drop is very possible."
(Read More: Watch Out! Reversal of the 'Great Rotation' Coming)
Among earnings, Costco rose after the wholesale retailer posted higher-than-expected earnings, thanks to its membership fee increase and market share gains.
Yum Brands gained after the parent company of KFC and Pizza Hut said same-store sales in China climbed 2 percent in February, surprising analysts who had expected a decline of 9 percent. The company also posted a 20 percent decline in the first quarter, less than the 25 percent drop the company had previously estimated. Jefferies and Susquehanna raised their price target on the company to $60 from $54 and to $67 from $62, respectively.
Merck rallied to lead the Dow and S&P 500 gainers after the pharmaceutical giant said that an independent monitoring board allowed the company to continue with a trial assessing the safety and effectiveness of its Vytorin cholesterol drug.
Apple slumped after Jefferies cut its target price on the iPhone maker to $420 from $500. Apple spiked in the previous session amid unconfirmed rumors that the next iPhone will include a fingerprint sensor and a near-field communications chip for mobile payments. In addition, traders buzzed about a possible special dividend from the tech giant.
(Read More: Apple Chart Looks 'So Bad That It's Good')
RadioShack dropped after Goldman Sachs downgraded the electronics retailer to "sell" from "neutral," calling the business model "challenged" and saying it sees "minimal equity value."
Red Hat tumbled to lead the S&P 500 laggards after Citigroup cut its rating on the software company to "neutral" from "buy."
Treasury prices remained higher after the government auctioned $32 billion in 3-year notes at a high yield of 0.411 percent. The bid-to-cover ratio, an indicator of demand, was 3.51.
Small business optimism gained in February, according to the National Federation of Independent Business as owners seemed to overlook the fiscal policy tightening and made plans to increase capital spending.
European shares eked out small gains, closing just shy of 4-1/2 year highs.
(Read More: Could Europe's Crisis Be Over By End 2013?)
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
WEDNESDAY: Mortgage applications, retail sales, import/export prices, business inventories, oil inventories, 10-yr note auction; Earnings from Express
THURSDAY: Jobless claims, PPI, current account, Fed Governor Raskin speaks, natural gas inventories, 30-yr bond auction, Fed balance sheet, money supply, Samsung Galaxy S4 release; Earnings from Aeropostale
FRIDAY: Quadruple witching, CPI, Empire State mfg survey, Treasury int'l capital, industrial production, consumer sentiment, credit card default rates
More From CNBC.com: