NEW YORK (Reuters) - The Standard & Poor's 500 just barely extended a streak of gains to a fourth day on Wednesday, ending above 1,400 in another thinly traded session.
Expectations for stimulus from the European Central Bank and the U.S. Federal Reserve triggered the recent gains, but investors found little reason to keep pushing stocks higher after driving the market to three-month highs.
The three major U.S. stock indexes opened lower but recovered at midday, led by consumer staples (.GSPS) and health care (.GSPA). Both are defensive plays, an indication that investors are keeping their enthusiasm in check.
"It's very positive that we found better footing throughout the session, which indicates that the market's path of least resistance is higher," said Jeff Mortimer, director of investment strategy for BNY Mellon Wealth Management in Boston.
The hope for central bank action comes amid projections of poor growth for coming quarters and lackluster demand worldwide.
In a sign of that weakening demand, McDonald's Corp (MCD) fell 1.7 percent to $87.53 after reporting flat same-store sales in July, the worst performance for the Dow component in more than nine years.
"The idea that Europe will remove itself from the brink is clearly contributing to the tone in markets. There's a feeling that central banks will do whatever it takes to provide liquidity, should things get worse," said Mortimer, who helps oversee $171 billion in assets.
The Bank of England gave little indication that it would rush to pour in further stimulus even as it sharply cut its forecast for medium-term economic growth in Britain. France's central bank forecast a contraction in growth going into the third quarter, citing weak demand from the periphery and Britain.
The Dow Jones industrial average (^DJI) rose 7.04 points, or 0.05 percent, to 13,175.64 at the close. The Standard & Poor's 500 Index (^GSPC) edged up just 0.87 of a point, or 0.06 percent, to finish at 1,402.22. But the Nasdaq Composite Index (^IXIC) slipped 4.61 points, or 0.15 percent, to end at 3,011.25.
Spanish benchmark 10-year debt yields briefly rose above 7 percent, underscoring the cautious tone from investors recently disappointed by lack of coordination from European officials in their efforts to reignite the economy.
Markets are pricing in the idea that it may take time until Spain asks for a bailout, which would open the door for ECB intervention.
Wednesday's market moves appeared to be largely driven by algorithmic trading, signaling a lack of conviction in any one direction.
Volume was light, with about 5.72 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 7.84 billion.
The consumer discretionary sector (.GSPD) was the day's weakest, falling 0.4 percent as fashion juggernaut Ralph Lauren (RL) and travel websites Priceline (PCLN) and Orbitz (OWW) both forecast slowing demand due to the global slowdown.
Ralph Lauren shares fell 1.1 percent to $151.39. Orbitz sank 25.5 percent to $3.47 and Priceline plummeted 17.3 percent to $562.32.
Shares of Dean Foods (DF), which is spinning off a unit, jumped 40.6 percent to $17.46 a day after posting a stronger-than-expected quarterly profit.
The stock of MEMC Electronic Materials Inc (WFR) shot up nearly 11 percent to $2.28 after the silicon wafer maker reported a surprising quarterly profit on an adjusted basis.
Williams Partners (WPZ) shares dropped 4.2 percent to $50.85 after the energy infrastructure company announced the offering of 8.5 million common units.
Just under half of the stocks traded on the New York Stock Exchange closed higher on Wednesday, while on the Nasdaq, about 42 percent of shares closed higher.