The stock market closed narrowly mixed Monday after a strong earnings report from Caterpillar Inc. offset investors' concerns about financial regulation.
The Dow Jones industrial average, supported by Caterpillar, eked out a gain of 1 point. Broader market indexes fell modestly.
Banking shares fell as negotiations on financial overhaul legislation continued in Washington.
Caterpillar, whose results are seen as an economic indicator, reported earnings that beat analyst expectations after a one-time charge related to health care. The company said economic conditions are "definitely improving" and that orders for its heavy equipment are significantly higher than last year.
Investors also got some good news from Whirlpool Corp., which said profits doubled on higher sales of appliances in the U.S. and other countries. That's a signal that consumer spending is picking up.
News that car rental company Hertz Global Holdings Inc. agreed to buy rival Dollar Thrifty Automotive Inc. also helped stocks.
But investors showed caution throughout the day. A series of upbeat earnings reports have sent stocks steadily higher over the past week, and many analysts believe that strong corporate earnings results are already priced into the market.
Peter Cardillo, chief market economist at the brokerage Avalon Partners Inc. in New York, said the market is "perhaps defying logic at this point, and nevertheless moving up."
"We will be headed for some sort of a pullback, which could happen at any time," Cardillo said, adding he doesn't think it will be too steep, maybe 5 percent to 7 percent. "For the moment, the enthusiasm continues."
The Dow rose 0.75, or less than 0.1 percent, to 11,205.03. The Standard & Poor's 500 index fell 5.23, or 0.4 percent, to 1,212.05, while the Nasdaq composite index fell 7.20, or 0.3 percent, to 2,522.95.
Losing shares narrowly outpaced advancers on the New York Stock Exchange, where volume came to 1.2 billion shares.
Caterpillar rose $2.87, or 4.2 percent, to close at $71.65.
This week will bring a stream of earnings news from companies across a range of industries, including Ford Motor Co., Exxon Mobil Corp. and UPS Inc. Consumer products companies including Procter & Gamble Co. are also scheduled to release their results.
Hertz, the world's largest car rental company, agreed to buy rival Dollar Thrifty for almost $1.2 billion in cash and stock.
Hertz closed up $1.81, or 14.1 percent, at $14.69, while Dollar Thrifty rose $4.22, or 10.9 percent, to $43.07. Investors view mergers and acquisition activity as a sign of investor confidence about the economy.
Investors also got some reassurance about Greece's debt problems. The Greek government on Friday said it wanted to tap a rescue package from 15 European countries and the International Monetary Fund. Investors have been concerned that Greece could default on its debt and that the trouble there would spread to other countries.
Financial shares slid as negotiations on financial overhaul legislation continued in Washington.
Senate Democrats reached a tentative deal on sweeping new rules for the derivatives market. Derivatives are the complex securities blamed for helping precipitate the 2008 financial crisis, but they also have earned big profits for banks.
"We are starting to see the financials crack, or get a little shaky," Hobart said, speaking about bank and other financial company stocks. "Going forward really for the next several months we are going to see a lot of choppiness and volatility in financials, simply because we don't know all the plans (the government) is putting together."
JPMorgan Chase & Co. lost $1.05, or 2.3 percent, to $43.89, while Bank of America Corp. shed 38 cents, or 2.1 percent, to $18.05.
Citigroup Inc.'s shares fell 5.1 percent after the Treasury said it plans to sell up to 1.5 billion shares of Citigroup stock, its latest move to unwind the support it provided big banks during the financial crisis. Citi shares fell 25 cents to $4.61.
Gold and the dollar both rose. Oil prices fell 92 cents to settle at $84.20 on the New York Mercantile Exchange.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note fell to 3.81 percent from 3.82 percent late Friday.
The Russell 2000 index of smaller companies fell 3.06, or 0.4 percent, to 738.86.
In European trading stocks are higher in reaction to Greece's request for rescue funds. The FTSE-100 in London rose 0.5 percent. The CAC 40 index in Paris rose 1.2 percent.
Stocks closed higher in Tokyo. The Nikkei 225 average rose 2.3 percent.