Stocks Waffle as Investors Eye Financials, Market Highs

NEW YORK (TheStreet) -- Stocks finished mixed Wednesday as the markets weighed positive results of bank stress tests against market highs achieved on Tuesday.

The latest round of bank stress tests gave a boost of confidence to buyers in the prior session. On Wednesday, American Express(AXP) and Bank of America(BAC) lent some support to the blue-chip index. The Dow Jones Industrial Average closed up 16.4 points, or 0.12%, at 13,194, after finishing at its highest level since December 2007 on Tuesday.

The S&P 500 lost 1.7 points, or 0.1%, at 1394.

Financials wavered throughout the day, while utilities traded in the red, signaling mixed market sentiment. "Financials are important because if they continue to outperform as they had in the previous trading session it means investors are feeling that the financial crisis is continuing to fade away," says Michael Gayed, chief investment strategist at Pension Partners. "It's the opposite if they're underperforming. Because utilities are dividend heavy, outperformance would mean a flight to safety."

The Nasdaq was added 0.9 points, or 0.03%, to close at 3041, after the index closed above the 3000 milestone for the first time since the year 2000.

"Bearishly inclined technicians are likely to persist and once again warn that New York Stock Exchange volume remains too low, making the market vulnerable to a significant selloff," said Ed Yardeni of Yardeni Research. Market watchers note that in the past two years, stocks rallied to a peak in April only to plunge later in the year. "There remains a widespread fear that this year could play out the same way again," added Yardeni.