Investors failed to push the Dow to a record close on Monday after the index had pushed through the 16,000 level earlier in the session.
Driven by optimism that the Federal Reserve would keep its foot firmly on the economic-stimulus gas pedal, the Dow Jones Industrial Average broke though the benchmark barrier shortly after the opening bell.
It rose to an intraday record of 16,030.28 before closing unofficially 14 points ahead at 15,976.02.
The S&P 500 also passed a psychological hurdle, rising above 1,800 for the first time during the day but closed down 6 points at 1,791.53. The Nasdaq struggled on either side of unchanged, after coming within half a dozen points of 4,000, but closed down 36 points at 3,949.07.
The markets turned mostly negative after investor Carl Icahn said he is "very cautious" on equities. He said he could see a "big drop" because earnings at many companies are fueled more by low borrowing costs than management's efforts to boost results.
"It's pretty much Icahn and the benefits of Twitter," that deflated the market, said Art Cashin, director of floor operations at UBS, referring to tweets of Icahn's comments made at a Reuters summit Monday afternoon.
Benchmark indices initially trimmed their rise after the release of the National Association of Home Builders/Well Fargo Housing Market Index, which found home builder confidence to be flat this month from a downwardly revised level of 54 the prior month.
Underlying gains that took the Dow above 16,000 for the first time and the S&P 500 above 1,800 is ongoing optimistic about stimulus bond-buying from the Fed.
"The market is very Fed oriented," said Paul Nolte, managing director at Dearborn Partners."Every question gets answered with what does this mean to the Fed? The builders confidence falling below forecasts means the Fed is going to stay in the market," said Nolte, downplaying the survey's impact.
"Although the stock market does not appear to have the typical 'bubble' characteristics of ultra-high valuation levels seen in 2000 and 2007 or the rapidly rising interest rates and slowing money supply conditions of those years, it does appear extended from a near-term technical perspective and ripe for a modest near-term pullback," Fred Dickson, chief investment strategist at Davidson Companies, wrote in emailed commentary.
The dollar fell against global counterparts and the yield on the 10-year Treasury note used in figuring mortgage rates and other consumer loans fell 4 basis points to 2.67 percent.
Crude-oil futures turned lower, falling 0.9 percent to $93.03 a barrel; gold futures fell $15.10, or 1.2 percent, to $1,272.30 an ounce.
In prepared remarks, New York Federal Reserve president William Dudley said economic fundamentals are improving, and that there is a sound case to be made that the pace of growth, while disappointing in 2013, should pick up some next year.
Speaking at a conference in Philadelphia, Philly Fed President Charles Plosser suggested the central bank should communicate the amount of assets it intends to purchase and start phasing out the program known as quantitative easing.
At a conference Monday in the United Arab Emirates, Boston Federal Reserve President Eric Rosengren told reporters capital ratios have improved in the United States, with bank lending on the rise to households and corporations.
Stocks in China climbed after the government vowed to ease its one-child policy and increase private investment as part of a package of economic reports.