Investors turned cautious Monday ahead of the Federal Reserve's meeting on interest rates.
Major stock indexes closed narrowly mixed after trading lower for most of the day. An analyst upgrade of Wal-Mart Stores Inc. helped lift the Dow Jones industrial average by about 18 points to its fifth straight gain.
Investors will be looking to the Fed's statement that follows its meeting Tuesday for clues about the economic recovery and the central bank's plans for interest rates. Policymakers are almost certain to keep the Fed's benchmark rate unchanged at near zero.
While investors have been factoring in an eventual rate hike, any signs that the move will be made sooner rather than later could hurt stocks.
"The market is hoping that they will give us some sort of timeline as to when they will begin tightening monetary policy. I don't think that's very likely," said Scot Johnson, senior client portfolio manager with Invesco Fixed Income in Houston.
The market's cautious tone gave a boost to safe investments like the dollar. Its advance drove down energy prices and, in turn, shares of energy companies.
Some of Monday's selling came in response to economic developments in China. Statements from Chinese officials about the nation's currency fed new concerns that China's efforts to slow its economy and curb inflation would hurt a global recovery.
The Dow rose 17.46, or 0.2 percent, to 10,642.15, its highest close since Jan. 19. It was the Dow's 10th advance in 12 trading days.
The Standard & Poor's 500 index rose 0.52, or 0.1 percent, to 1,150.51. The index is at its highest level since Oct. 1, 2008.
The technology-dominated Nasdaq composite index fell 5.45, or 0.2 percent, to 2,362.21.
Bond prices moved in a tight range before the Fed meeting. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.70 percent from late Friday.
The dollar rose against most other major currencies. Gold prices also rose.
Crude oil fell $1.44 to settle at $79.80 per barrel on the New York Mercantile Exchange. A stronger dollar makes energy prices more expensive to foreign buyers. That, in turn, reduces demand and hits prices.
Trading began on a down note after credit ratings agency Moody's said that debt loads are stretched in the U.S. and Britain. The countries carry the top "AAA" rating. And a drop in the rating would make it more expensive for the government to borrow money.
In economic news, a report showed that manufacturing activity in New York has slowed less than expected in March. The Empire State manufacturing index fell to 22.9 from 24.9 in February. Economists had predicted a drop to 21.5.
A separate report found that industrial production unexpectedly rose in February. The Fed said output from the nation's factories, mines and utilities rose 0.1 percent, while economists polled by Thomson Reuters had forecast a drop in activity. It was the eighth consecutive month of growth, showing the industry is recovering from the recession.
Investors sold financial stocks ahead of an afternoon proposal from Sen. Chris Dodd to overhaul financial regulations. Dodd is a Democrat from Connecticut and chairman of the Senate Banking Committee. Financial shares pulled off their lows after the plan was announced but still ended the day with losses.
The bill would boost the government's ability to dismantle big financial companies whose collapse could threaten the economy. It also would require that the industry pay for its failures. The plan also would have the Fed write rules over consumer lending.
Shares of Citigroup Inc. fell 8 cents, or 2 percent, to $3.89. Goldman Sachs Group Inc. fell $1.43, or 0.8 percent, to $173.53.
Energy stocks fell after oil dropped. Exxon Mobil Corp. fell 50 cents to $66.30. Chevron Corp. slipped 15 cents to $73.57.
The broader questions about the speed of the recovery made safer stocks more attractive. Consumer staples stocks rose. Procter & Gamble Co., whose brands include Tide detergent and Gillette razors, rose 38 cents to $63.70.
Wal-Mart rose $1.52, or 2.8 percent, to $55.42 after a Citi Investment Research analyst said the retailer looks like it will cut prices on food, one of the lowest-margin segments in retailing. Wal-Mart is competing with the supermarket companies for market share.
Tech stocks fell on news reports that Google Inc. could soon shut its Internet search operations in China because of disagreements with Chinese officials about censorship. Google fell $16.36, or 2.8 percent, to $563.18.
Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 926.7 million shares, compared with 1.1 billion Friday.
The Russell 2000 index of smaller companies fell 2.18, or 0.3 percent, to 674.41.
Britain's FTSE 100 fell 0.6 percent, Germany's DAX index fell 0.7 percent, and France's CAC-40 lost 0.9 percent. Japan's Nikkei stock average rose less than 0.1 percent.