Investors moved cautiously after Tuesday's strong runup, as a flare-up in uncertainty out of Egypt offset encouraging private-sector employment in the U.S. and another raft of corporate earnings.
The Dow Jones Industrial Average slipped in and out of positive territory. By late morning it was up three points at 12043, while the Standard & Poor's 500-stock index fell two points to 1306 and the Nasdaq Composite Index added four points to 2755.
Investors were closely watching developments in Egypt, where violent clashes erupted on the streets of Cairo between supporters and opponents of President Hosni Mubarak.
Todd Salamone, director of research at Schaeffer's Investment Research, said the prospect of increasing violence in Egypt could heighten investor worries, but he argued: "A lot of this is priced into the market.
"When you get a move like Tuesday's, there may be some traders sitting back, waiting for a pullback to accumulate positions," Mr. Salamone said.
Oil was higher amid the uncertainty, with crude rising above $91 a barrel, while the Market Vectors Egypt Index, an exchange-traded fund of Egypt-related stocks, fell 2.3%.
Wednesday's stock declines were broad-based, with all of the S&P 500's 10 sectors declining. Weighing most heavily on the index were materials and financial stocks.
The market was digesting an increase of 187,000 private-sector jobs in January, the 12th consecutive month of private-sector employment growth, according to Automatic Data Processing. But ADP lowered its December figure, to 247,000 new jobs from a previous estimate of 297,000.
The encouraging private-sector jobs number comes ahead of initial jobless claims data on Thursday and the closely-watched official monthly jobs number on Friday.
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Traders at the New York Stock Exchange at the end of the trading day on Feb. 1.
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In earnings news, shares of Electronic Arts rose 15% after the video game publisher said late Tuesday that its third-quarter fiscal loss widened as sales fell, but announced a better-than-expected forecast for the current quarter and a plan to spend $600 million buying back its stock.
Mattel rose 2.3% after the toy maker reported improved sales across its major divisions and increased its dividend 11%, raising the quarterly payout to 23 cents a share.
Hershey was up 1.8% after fourth-quarter earnings rose 6.9% as the candy maker posted sharply lower restructuring charges, while sales and margins both improved.
Media concern Time Warner rose 5.1% after fourth-quarter profit rose 22% and adjusted results topped expectations amid strength at its networks businesses.
Whirlpool tumbled 4.9% after fourth-quarter earnings rose a smaller-than-expected 80%, though revenue topped estimates as cost-cutting and higher unit volume offset higher materials costs. The company projected earnings for the year well ahead of the Street forecast.
Marathon Oil fell 0.3% after fourth-quarter earnings surged 99%, making it the latest oil company to post strong earnings, citing higher oil prices and improved refining margins.
Investors were awaiting earnings from Visa and News Corp., which owns the publisher of The Wall Street Journal, after the market close.
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Dow Breaks Through 12000
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Wednesday's moves came a day after the Dow Jones Industrial Average posted the strongest one-day jump in two months, rising 148.23 points, or 1.3%, to 12040.16. That marked the blue-chip index's first close above 12000 since June 19, 2008, while the S&P 500 finished above 1300.
In Europe, stocks were generally weaker, with the Stoxx Europe 600 slightly lower. Shares of Spain's second-largest bank, Banco Bilbao Vizcaya Argentaria, or BBVA, fell 1.7% in U.S. trading after disappointing fourth-quarter results, though the country's IBEX 35 index rose 1.5%.
Roche Holding fell 2.4% in U.S. trading after the drug maker said restructuring charges and slowing U.S. and European sales hit 2010 earnings.
In Asia, Tokyo's Nikkei Stock Average and Hong Kong's Hang Seng Index both rose 1.8%.
The yield on the benchmark 10-year Treasury fell to 3.3422%, as demand for the relative safety of the instruments increased.
Gold fell 0.2%, while copper fell slightly from Tuesday's record close. The dollar was flat against its major rivals.
Write to Jonathan Cheng at jonathan.cheng@dowjones.com
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