Wall Street touched fresh records earlier in the day before giving up gains as investors await clues from the US Federal Reserve on its plans for maintaining stimulus measures.
The minutes from the latest Fed's policy committee meeting are due on Wednesday, the same day that Fed Chairman Ben Bernanke will be giving testimony to Congress.
In late afternoon trading in New York, the Dow Jones Industrial Average was down 0.12 per cent, as was the Nasdaq Composite Index. The Standard & Poor's 500 Index edged 0.02 per cent lower.
Earlier in the day, both the Dow and the S&P 500 had touched record highs, of 15,391.84 and 1,672.84 respectively.
"This move in the market has defied all the sceptics," E William Stone, chief investment strategist at PNC Wealth Management in Philadelphia, told Bloomberg News. "While all of us know where there will be some pullback at some point, it's hard to be the person to bet that tomorrow will be the case."
Meanwhile, corporate America feels comfortable enough to make big acquisitions.
Shares of Yahoo rose, last up 0.5 per cent, after it agreed to buy blogging network Tumblr for about US$1.1 billion.
The acquisition is not without risk however.
"It's an aggressive move," Zachary Reiss-Davis, an analyst at Forrester Research, told Bloomberg News. "They are saying, 'where is our next group of people who are going to spend many hours per week on Yahoo properties?' It's a big bet that the answer is going to be Tumblr users."
In other deals, Actavis agreed to buy specialty pharmaceutical company Warner Chilcott for US$5 billion in stock. Websense will be acquired by private-equity firm Vista Equity Partners in a deal valued at about US$906 million.
In Europe, the benchmark Stoxx 600 Index gained 0.3 per cent from the previous close. The UK's FTSE 100 gained 0.5 per cent, as did France's CAC 40. Germany's DAX rose 0.7 per cent.
The yen rose as much as 1.2 per cent against the US dollar after Japan's Economy Minister Akira Amari suggested the Japanese currency might have fallen enough. The greenback last traded at 102.50 yen.
The Bank of Japan begins a two-day policy meeting on Tuesday.
The appeal of gold increased as Moody's Investors Service warned that the US could face a downgrade if it doesn't reduce its debt. Gold futures for June delivery rose 1.4 per cent to settle at US$1,384.10 an ounce on the Comex in New York.