Stocks squeezed out small gains Wednesday, helped by a better-than-expected existing home sales report and after Japan's central bank expanded a bond-buying program to boost its economy.
The Dow Jones Industrial Average gained 13.32 points, or 0.10 percent, to close at 13,577.96, led by Walt Disney and Home Depot.
The S&P 500 edged up 1.73 points, or 0.12 percent, to finish at 1,461.05. The Nasdaq eked out a gain of 4.82 points, or 0.15 percent, to end at 3,182.62.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, slid below 14.
Among key S&P sectors, consumer discretionary gained, while energy slipped.
“The reaction to QE3 was amazing, but market’s looking a bit overextended and tired here,” said Harry Clark, chairman and CEO of Clark Capital Management Group. “We’re nearing a top and due for a 6 to 8 percent pullback, which typically you’ll see through October before rallying through year-end.”
On the economic front, existing home sales gained in August, jumping to its highest level since May 2010, according to the National Association of Realtors. And housing starts rose 2.3 percent to a seasonally adjusted annual rate of 750,000 units in August, according to the Commerce Department.
Homebuilders including Pulte , Beazer and DR Horton traded sharply higher across the board.
Also giving a boost to stocks, the Bank of Japan said it would step up bond buyingin an announcement that came a month earlier than expected. Japan's Nikkei hit a four-month closing high.
"Now that the [central banks] have lit the fire under risk assets, it’s hard to find the next near-term catalyst to get the buyers excited for another leg up," wrote Elliot Spar, market strategist at Stifel Nicolaus. "The market doesn’t need a catalyst for a pullback. When buyers get exhausted, the advance narrows too much, or the buy-the-dip crowd gets caught holding too many names that are not working, we’ll get more than a minor two-day dip."
Meanwhile, oiltumbled for a third-consecutive sessionafter the EIA's weekly inventory report showed inventories jumped 8.5 million barrels—far more than expected. (Read More: Why Are Oil Prices Continuing to Fall?)
Groupon surged after the daily-deal site launched a mobile payment app, allowing merchants to swipe credit cards using an iPhone or iPod Touch. The company aims to take on established players such as AmEx , Visa -backed Square, along with PayPal and Google .
Meanwhile, Facebook hit a six-week high on heavy volume in midday trading. Other social-media companies were also higher, including Zynga and Yelp .
JCPenney briefly shot up 10 percent following comments from CEO Ron Johnson who said the company's remodeled shops are "comping 20 times better" than the rest of the stores. Shares ended flat.
Apple and four major publishers have offered to let retailers such as Amazon sell e-books at a discountfor two years to end an EU antitrust investigation, according to the the European Commission. Apple shares closed above $700 for the first time on Tuesday, a day after the tech giant said its iPhone 5 sales set a record over the weekend.
3M became the latest major company to caution about the economic outlook, saying its initial 7 to 8 percent revenue growth forecast is now a "stretch target." Earlier this month, global economic bellwether FedEx had warned the slowing economy was hurting its results, following larger rival UPS, which cut its 2012 profit forecast in July.
Questcor plunged more than 40 percent after health-insurance company Aetna said it would no longer reimburse the pharmaceutical company's Acthar gel drug.
Big-box retailer Wal-Mart and health care insurer Humana will join efforts to trim the cost of healthy foodsfor more than 1 million customers.
Goldman Sachs announced that senior trading executive Harvey Schwartz would take over as CFO. He replaces David Viniar, who will join the company's board as non-independent director.
Among earnings, AutoZone gained even after the auto-parts retailer said quarterly sales growth slowed. And General Mills rose after the food producer reported better-than-expected earningsand stood by its full-year guidance.
Adobe and Bed Bath & Beyond are slated to post earnings after the closing bell.
Weekly mortgage applications slipped last week, though refinancing demand rose as rates declined to a record low, according to the Mortgage Bankers Association.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
THURSDAY: Jobless claims, Philadelphia Fed survey, leading indicators, Fed's Kocherlakota speaks; Earnings from CarMax, ConAgra, Rite Aid, Oracle
FRIDAY: Quadruple witching, Fed's Lockhart speaks, iPhone 5 shipping date
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