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Stocks moved between small gains and losses in choppy trading Wednesday, after a four-day winning streak and ahead of the release of minutes from the Federal Reserve's latest policy meeting that might give a clearer signal on the Fed's direction.
"Everyone will be watching the Fed minutes," said Gene Goldman, director of research at Cetera Financial Group. "The market's been like the game 'Chutes and Ladders'?we move up steadily hoping that the Fed does everything correctly and on any sign that they're tapering too quickly, we move down the chute."
The Dow Jones Industrial Average dipped into negative territory and was down 26 points in afternoon trading. The blue-chip index had been trading in a narrow 70-point range.
The S&P 500 and the Nasdaq wavered in a narrow range. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 14.
Among key S&P sectors, health care held modest gains, while financials dragged.
Investors were waiting for hints as to when the Fed will pare back its bond-buying program. The minutes from the Federal Open Market Committee meeting were being released in the afternoon and Fed Chairman Ben Bernanke was scheduled to speak from the National Bureau of Economic Research conference after the market closes.
(Read More: Is Small-Cap Stock Rally Signaling It's Time to Buy?)
"There's no reason to think Bernanke is going to be showing his hand right now," said Brian Edmonds, head of interest rates at Cantor Fitzgerald.
On the economic front, wholesale inventories declined 0.5 percent in May, falling by the most in over a year and a half, according to the Commerce Department. Economists in a Reuters survey forecast inventories to rise 0.3 percent versus an increase of 0.2 percent in April. However, sales were stronger than expected, rising 1.6 percent.
And weekly mortgage applications dropped last week as the surge in interest rates pushed borrowing costs to their highest level in two years, according to the Mortgage Bankers Association.
"The housing market's improving, consumer balance sheets are being repaired and corporate balance sheets are strong," noted Goldman. "But there are still negative overhangs?Europe's still not fixed, there's been bad news from China and there are geopolitical risks everywhere. We think while the market's had a nice run, we'll see increased volatility for the rest of the year."
The Treasury was scheduled to auction $21 billion in 10-year notes in the afternoon.
Meanwhile in China, the Shanghai Composite rallied after dismal exports data for June piqued hopes that the People's Bank of China could ease monetary policy in order to boost growth.
"My base line is that there is no export growth in China this year, at least until we see a pick from the G-3 economies begin to materialize," said Tim Condon, head of research for Asia with ING Financial Markets.
In Europe, the euro recovered after tumbling to a three-month low against the dollar following Italy's downgrade by credit ratings agency S&P on Tuesday. Italy's government debt is now rated two notches above "junk" status, at BBB.
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