Wavering on Wall Street

NEW YORK (CNNMoney.com) -- Stocks drifted lower Wednesday, preventing the blue-chip Dow Jones industrial average from scoring its second record close in as many days.

The 30-stock Dow (down 7.45 to 12,463.87, Charts) scaled a new record trading high of 12,498.47 but pulled back late in the session. On Tuesday, the Dow closed at its best level ever.

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The broader S&P 500 index (down 2.02 to 1,423.53, Charts) and the tech-heavy Nasdaq composite (down 1.94 to 2,427.61, Charts) also finished the session about where they started.

A fresh burst of deals gave the market a boost early on as investors cheered the pace of merger activity.

Major overseas indexes rebounded after the Thai government lifted the controls on foreign stock investments that roiled global markets Tuesday

A disappointing forecast from package delivery company FedEx raised some concerns.

But overall, the positive mood that has driven the market's recent rally held firm.

The Dow has closed at a record high 21 times since October, and the S&P 500 is trading at a six-year high.

"Investors don't want to get spontaneous at the end of the year," said Robbert Van Batenburg, head of global research at Louis Capital Markets. "At this point, there's not really a lot that can derail the market until the start of the new year."

Investors had no economic news to guide them Wednesday, but Thursday brings some important reports.

Investors will be on the lookout for the final reading of GDP growth in the third quarter. Gross domestic product is the broadest measure of the nation's economic activity.

Also on tap: the Philadelphia Fed's survey that measures regional manufacturing activity, weekly jobless claims and leading economic indicators.

After the market close, Bed Bath & Beyond (Charts) said its net income rose 6 percent in the latest quarter. Shares of the retailer rose almost 3 percent in after-hours trading.

Nike (Charts) also reported a rise in quarterly profit after the closing bell. Shares, which had jumped 4 percent during the regular session, fell slightly in extended trading.

In regular trading, 20 Dow components fell and 10 advanced.

Computer maker Hewlett-Packard (up $0.91 to $41.34, Charts), up more than 2 percent, led gains as it hit a fresh 52-week high.

Elsewhere, FedEx (down $2.15 to $111.85, Charts) slid almost 2 percent after it warned about results for the current period.

The Dow transport average sank 1 percent on the dim forecast.

After the close Tuesday, telecom equipment maker Ericsson (Charts) said it will buy data networking equipment vendor Redback Networks for $2.1 billion. Shares of Redback (up $4.49 to $25.66, Charts) soared 21 percent Wednesday.

The Amex Networking Index (up $1.67 to $253.36, Charts) gained nearly 1 percent on the deal.

Casino operator Harrah's Entertainment (up $0.37 to $82.69, Charts) said late Tuesday that it agreed to be bought for $17.1 billion by private investors Apollo Management and Texas Pacific Group.

French advertising company Publicis said it would buy direct-marketing firm Digitas for $1.3 billion. Digitas (up $2.42 to $13.35, Charts) shares surged 22 percent.

Troubled computer maker Dell (down $0.36 to $25.77, Charts) named Donald Carty, the former CEO of American Airlines parent AMR, the company's new chief financial officer. Dell shares fell about 1 percent.

U.S. light crude oil for February delivery rose 26 cents to settle at $63.72 a barrel on the New York Mercantile Exchange after a weekly report on fuel inventories showed a dip in crude stocks.

Treasury prices held steady, leaving the yield on the benchmark 10-year note at the 4.59 percent level reached late Tuesday.

The dollar edged higher against the euro and the yen.

COMEX gold futures lost $1.10 to $624.30 an ounce.

In global trade, Japan's Nikkei and Hong Kong's Hang Seng both gained more than 1 percent, and Thailand's main stock gauge, the SET, rallied 11 percent. European shares finished the session slightly higher.

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