Stocks edged lower on Tuesday as investors paused after a seven-session string of gains and the Bundesbank's chief warned the euro zone's crisis has not ended.
Both the Dow and benchmark S&P 500 index have rallied for seven consecutive sessions, with the Dow closing at another record high on Monday and the S&P within 10 points of its all-time closing high of 1,565.15, set on October 9, 2007.
Any pullback may be short-lived, however, as investors have been using recent dips as a buying opportunity.
Sounding a note of caution in Europe, Jens Weidmann, head of Germany's central bank and a member of the European Central Bank's governing council, said the euro zone's "crisis is not over despite the recent calm on financial markets," adding that the region's economic stability remains on shaky ground.
"The thought is they have their problems and they are working on those problems, just as we did," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
On Wall Street, investors' confidence has grown, leading to a gain of more than 10 percent for the year by the Dow and more than 9 percent by the S&P. Signs of improvement in the economy and the Federal Reserve's quantitative easing have helped to drive the gains.
The boost in confidence was reflected in the Chicago Board Options Exchange Volatility Index <.VIX>, Wall Street's so-called fear gauge, which gained 2.8 percent to 11.88 but was at its lowest intraday level since April 2007.
"The data has been improving. No horror stories out of Europe at the moment, and China is on the mend. There is nothing out there that tells you anything besides 'stay long and be long,'" said Lesh.
The Dow Jones industrial average <.DJI> shed 7.80 points, or 0.05 percent, to 14,439.49. The Standard & Poor's 500 Index <.SPX> slipped 1.89 points, or 0.12 percent, to 1,554.33. The Nasdaq Composite Index <.IXIC> lost 6.33 points, or 0.19 percent, to 3,246.55.
Merck shares jumped 4.4 percent to $45.60 to help curb declines on both the Dow and S&P after the pharmaceutical company said an independent monitoring board had allowed it to continue with a large trial assessing the safety and effectiveness of its Vytorin cholesterol treatment.
Retailer Costco Wholesale Corp posted a 39 percent increase in quarterly profit, beating expectations, on increasing sales, membership fees and a tax benefit related to a special cash dividend. Costco shares gained 1.5 percent to $104.02.
Yum Brands Inc advanced 3.4 percent to $70.06 after the parent company of the KFC restaurant chain reported an unexpected rise in February sales in China.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama, Kenneth Barry and Nick Zieminski)