Stocks failed to end higher in volatile trading Thursday, snapping a four-day win streak, ahead of the widely-watched government jobs report. The Dow and S&P 500 hit record intraday highs earlier in the session.
The Nasdaq was the biggest loser of the three major averages, pressured by declines in momentum and biotech stocks.
Traders were pointing to buy orders on the close when the market pared their losses late in the session. "There were about have a billion (dollars) to buy market on close," said Art Cashin, director of floor operations at UBS.
The Global X Social Media ETF, which includes Facebook, LinkedIn and Groupon, dropped more than 3 percent. The Nasdaq biotechnology index also slid 3 percent. Momentum stocks including Tesla, Netflix and Priceline were also in the red as investors took profits from recent gains.
"We've seen this kind of divergence off and on in the last two weeks and it's a good story," said Art Hogan, chief market strategist at Wunderlich Securities. "The S&P is hitting new highs, but within the index, you have 10 different industry groups that are trading at different year-to-date increases – that correlation of breakdown is very healthy."
The Dow Jones Industrial Average slipped 0.45 points to close at 16,572.55. The blue-chip index earlier rose to set its first record high of 2014.
The dipped 2.13 points to finish at 1,888.77. And the Nasdaq fell 38.72 points to end at 4,237.74.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, closed above 13.
Among key S&P sectors, techs led the laggards, while telecoms gained.
"Something will pull this market back – you have to have pullbacks," said Quincy Krosby, market strategist at Prudential Financial. "As we get close to the finish line for the Fed, this market will be focused on fundamentals."
Investors also seemed hesitant to make big bets ahead of the monthly government jobs report due Friday. Economists polled by Reuters expect a gain of 197,000 new jobs in March. The U.S. created 175,000 jobs in February, exceeding expectations.
"Most people are assuming whatever happens, the market will take it in stride. If it's a weak number, it's weather related. If it's a very strong number, Yellen's not going to get pushed into tapering any faster," said Cashin. "They think it's kind of a no lose proposition."
On the economic front, weekly jobless claims gained more than expected last week, increasing 16,000 to a seasonally adjusted 326,000, according to the Labor Department. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 317,000.
Growth in the services sector accelerated in March, with the Institute for Supply Management saying its service sector index rising to 53.1 in March, slightly below expectations for a reading of 53.5 but ahead of the February read of 51.6.
"You've got some components that were underscoring that the weather-related data we've had is beginning to dissipate," said Krosby. "The employment component and new orders suggest we're trending higher…and points to tomorrow' [nonfarm payroll] numbers as being in the estimated range."
Meanwhile, U.S. trade deficit unexpectedly widened 7.7 percent to $42.3 billion in February, according to the Commerce Department as exports fell to their lowest level in five months, further signs economic growth slowed in the first quarter. Economists polled by Reuters had forecast the trade deficit falling to $38.5 billion.
Anadarko Petroleum spiked after the oil and gas exploration company and its Kerr-McGee unit reached a settlement resolving environmental cleanup claims stemming from the 2009 bankruptcy of paint materials maker Tronox.
Barnes & Noble tumbled sharply after Liberty Media said it has sold almost all of its stake in the bookstore chain.
Citigroup was slightly lower after the New York Times reported that U.S. authorities had launched a criminal investigation into a $400 million fraud involving the bank's Mexican unit.
Google's split between Class A and C shares took effect at the open Thursday. The old Google shares now known as Google Class A under the ticker symbol "GOOGL," and new Google Class C shares are taking on the old "GOOG" symbol.
European shares shaved their losses after European Central Bank President Mario Draghi said the central bank discussed a series of unconventional policy measures, including quantitative easing, at its latest policy meeting. Earlier, the ECB chose to keep interest rates unchanged at the record-low 0.25 percent, where it has stayed since last November.
Meanwhile, Russia's economy minister, Alexey Ulyukaev, told CNBC that JPMorgan will not face retaliation after it refused to process a payment by the Russian embassy.
"We will not press the companies about something they were doing by some political pressure," Ulyukaev said. "I do not think we have to freeze any kind of relationships."
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @ JeeYeonParkCNBC) Reuters contributed to this report.
Coming Up This Week:
FRIDAY: Nonfarm payrolls, GM 'Emergency Motion' hearing; Earnings from CarMax