NEW YORK (Reuters) - The iconic Dow eked out another all-time record high on Tuesday but global equity markets slid, while the yen rose from a 3-1/2-year low against the U.S. dollar for the first time in a week.
The benchmark S&P 500 stock index snapped a seven-session string of gains as investors pulled back from financials and technology shares, but the Dow Jones Industrial Average rose for an eighth straight day, pushed higher by Merck & Co.
European shares retreated from modest gains at the end of the session, just shy of a fresh 4-1/2-year closing high, and the S&P 500 fell after briefly trading higher earlier in the day. The Dow also posted a fresh record intraday high.
Investors' confidence in equities has grown, leading the Dow to gain more than 10 percent and the S&P 500 ro rise almost 9.0 percent so far this year. An improving economy and the Federal Reserve's quantitative easing also have helped drive the gains.
But a lack of fresh economic data and a warning from the Bundesbank's chief that the euro zone's crisis has not ended gave investors a reason to pause after the run-up.
"You have a little bit of buyers' exhaustion at this juncture," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
"We've had this move that has been startlingly smooth in terms of progression of advances, both since the beginning of the year and certainly over the last six to seven trading sessions," Luschini said.
The Dow Jones industrial average closed up 2.77 points, or 0.02 percent, at 14,450.06. The Standard & Poor's 500 Index fell 3.74 points, or 0.24 percent, at 1,552.48. The Nasdaq Composite Index slipped 10.55 points, or 0.32 percent, at 3,242.32.
Merck (Other OTC: MKGAY - news) gained 3.1 percent to $45.04 after an independent monitoring board said a large trial of its Vytorin cholesterol drug can continue, suggesting no major safety issues have yet been seen with the pill.
"We have seen several days with new all-time highs on Wall Street so it is not surprising to see it pause for a day," said Achim Matzke, a technical analyst at Commerzbank (Xetra: 803200 - news) in Frankfurt. "But I expect the bull market in U.S. equities to continue, and that to also help European equities," he said.
Hedge funds and long-term investors took profits on recent large bets against the Japanese currency. But speculation the Bank of Japan could embark on more aggressive monetary stimulus sooner than previously thought is likely to check any sharp rebound in the yen, traders said.
Gold rose nearly 1.0 percent on comments by Bundesbank chief Jens Weidmann, who is also a member of the Governing Council of the European Central Bank.
Spot gold prices rose $12.61 to $1,593.00 an ounce.
The dollar was down 0.25 percent on the day at 96.03 yen. The dollar had climbed to 96.71 yen, its highest since August 2009, in Asian trade.
The euro retreated, down 0.06 percent at $1.3034.
Oil retreated after having climbed toward $111 a barrel. Crude was pressured in early trade by the prospect of slower demand growth in China and the United States, the world's biggest oil consumers.
Brent crude fell 57 cents to settle at $109.65 a barrel. U.S. oil settled up 48 cents at $92.54 a barrel.
U.S. Treasury debt prices rose as a recent spike in yields lured investors and U.S. government debt tracked other safe-haven markets higher in the absence of key domestic data releases.
The benchmark 10-year U.S. Treasury note was up 12/32 in price to yield 2.0191 percent.
(Additional reporting by Marc Jones in London; Editing by Chizu Nomiyama, Nick Zieminski and Dan Grebler)