"It's not a major sell off, but the market has certainly reversed steam here," said Jay Suskind, director of trading at Ryan Beck & Co. "We've got light volumes and the market is a little tentative and nervous because of the strong market gains recently."
"Greenspan could be a catalyst for investors to take some profit, but not much more," Suskind said.
According to reports, Greenspan told a teleconference he feared a "dramatic contraction" in Chinese stocks, event hough global growth wouldn't necessarily be derailed by the move.
The Dow Jones Industrial Average was down 5 points at 13,534, after earlier hitting a new record high of 13,609, even as 20 of its 30 components still advanced. Weighing on the Dow were the likes of IBM , Intel , and McDonald's .
The Dow remained supported by Alcoa Inc. , which rose 2.7%. Alcan late Tuesday rejected the $27 billion hostile offer from the Dow-component. Alcan rose 4.2%.
The broad market remained supported deal-making news.
"The real driver is this huge pool of liquidity out there, both in the coffers of companies that use it for share buybacks or acquisitions, and in the private world ,with a lot of take out activity," said Art Hogan, chief market strategist at Jefferies & Co..
Separately, a newspaper report said that BHP Billiton has held early-stage talks with Alcan. Rio Tinto , which has also been rumored to be a target for BHP and for private equity interest, gained 1.8%. BHP gained 2.8%.
Also in the metals sector, Russia's Norilsk Nickel launched a new $6.25 billion offer for Canadian miner LionOre, topping an offer from Xstrata by 10%.
Elsewhere on the Dow, Boeing Co. fell 0.9% after reaffirming earnings guidance for 2007 and 2008.
The S&P 500 index gained 1.3 points to 1,525, putting it on track towards a record-high closing level. The previous record close of 1,527 was made in March 2000.
The Nasdaq Composite fell 3.1 points to 2,584.
Trading volumes showed 1.2 billion shares trading on the New York Stock Exchange and 1.5 billion trading on the Nasdaq stock market. Declining issues outpaced gainers by 17 to 16 on the NYSE and by 15 to 13 on the Nasdaq.
By sector, metals mining stocks led the gains, along with oil services and broker dealers . Semiconductors and software were among the few sectors falling.
Chip stocks were pressured by Analog Devices , which slumped 10% after reporting a 14% profit decline and saying current quarter earnings will be below market estimates. Both JP Morgan and Credit Suisse downgraded the stock.
In the media sector, members of the Bancroft family, which controls Dow Jones , are reportedly due to discuss the News Corp. takeover bid at a meeting. Dow Jones owns MarketWatch, which publishes this report.
In other deal news, Crescent Real Estate Equities Co. agreed to be acquired by funds managed by Morgan Stanley Real Estate for $22.80 per share in a deal valued at roughly $6.5 billion, including debt. The offer represents a 5.5% premium over Crescent's closing share price on Tuesday.
Payless ShoeSource said it would buy Stride Rite for $800 million.
With key U.S.-China economic talks entering their second day, investors will expect a statement to come out of Washington. Wall Street has viewed the talks as positive in easing rising trade tensions between China and the U.S.
With no major economic data on tap until durable goods and housing data on Thursday, bonds were down slightly, with the benchmark 10-year Treasury bond down 5/32 at 97 9/32, yielding 4.846%.
The dollar was down slightly against major counterparts.
Crude oil was litle changed ahead of supply data expected to show a build in gasoline inventories. A barrel was recently up 2 cents at $65.53.
There are a number of retailers due to report quarterly results.
Target posted better-than-expected earnings of 75 cents a share but its revenue, at $14.04 billion, fell short of estimates. Analysts polled by Thomson Financial expected on average, first-quarter earnings of 71 cents a share on revenue of $14.17 billion.
Abercrombie & Fitch and Limited Brands are also due to report results.
Standard & Poor's said it would add Memc Electronic Materials Inc. to the S&P 500, replacing Kinder Morgan Inc., on a date to be announced.
Elsewhere, Medtronic rose 2.6% after the company's quarterly earnings and revenue outstripped analyst estimates.
CA and Network Appliance also are due to report quarterly results.
Forest Laboratories Inc. and Cypress Bioscience Inc. said a Phase III study of the company's milnacipran drug showed significant therapeutic effects in patients with fibromyalgia syndrome.
By Nick Godt