Stocks slipped into negative territory as investors found little reason to keep buying after mixed news on the small-business sector and a weak reading from the U.K. factory sector.
The Dow Jones Industrial Average declined eight points, or 0.1%, to 14439 in midday trading, putting in jeopardy a seven-session streak of gains. A lower finish for the blue chips would be the index's first decline since breaking its 2007 all-time high a week ago.
The Standard & Poor's 500-stock index fell five points, or 0.3%, to 1551. The technology-oriented Nasdaq Composite Index lost 17 points, or 0.5%, to 3226.
A measure of market anxiety remained near multiyear lows. The Chicago Board Options Exchange's Volatility Index, which uses stock-index option prices to measure expectations for near-term price swings, rose 7.8% from Monday's six-year low.
On the economic front, the National Federation of Independent Business said its small-business optimism index for February rose and topped expectations. But the federation's reading on expected business conditions remained deep in recession territory, and business owners reporting declining sales far outnumbered those saying sales increased.
The Stoxx Europe 600 rose 0.1%, as the British statistics were offset by an upbeat outlook for the German economy. Manufacturing output in the U.K. fell 1.5% in January, much worse than expectations for slight growth. Meanwhile, Germany's Economy Ministry said the economy was on the verge of recovery.
Asian markets were broadly lower, led by a 1% decline in the Shanghai Composite, the index's fourth-straight loss, after China's central bank signaled it would drain more liquidity from the financial system. Japan's Nikkei Stock Average erased early gains to close down 0.3% and snap an eight-session winning streak.
April crude-oil futures added 0.9% to $92.90 a barrel, while March gold futures tacked on 0.8% to $1,592 a troy ounce. The dollar gained against the euro and fell versus the yen. Yields on benchmark 10-year Treasury bonds fell to 2.018% as demand rose.
Diamond Foods fell. The seller of Emerald snack nuts, Kettle chips and Pop Secret popcorn reported fiscal second-quarter earnings and revenue fell short of analysts' estimates, amid a sharp drop in sales of nuts.