Rising consumer confidence and better-than-expected economic activity in the Midwest helped US stocks off their lows but worries about eurozone debt still dominated.
The indices hovered around key technical levels and at some points the S&P 500 slipped under its 50-day moving average and the Dow Jones Industrial Average fell below 11,000.
?Bail-outs are never good and bail-outs of countries are even worse,? said Dan McMahon, director of equity trading at Raymond James. ?[The US indices] can turn around but it?ll take a fairly significant argument. Some investors are locking in profits given the performance of the markets.?
The S&P 500 was down 0.5 per cent to 1,182.31 by midday, the Dow Jones Industrial Average had lost 0.3 per cent to 11,019.80 and the Nasdaq Composite was 1 per cent lower at 2,500.06.
The indices were still set to finish November almost flat after a sharp rally in September and October.
Energy and consumer discretionary stocks led the risers over the month while the utilities and healthcare sectors suffered the most.
On Tuesday, stocks pared their losses after positive data on the US economy.
?Today?s catalyst for now is the Chicago PMI and the better-than-expected consumer confidence figures,? said Nino Jimenez, head of trading for Brinson Patrick. ?They point to the more largely folllowed ISM manufacturing index due out tomorrow as well as Friday?s employment numbers.?
The Chicago Purchasing Manager?s Index showed business activity in the region climbed faster than expected in November, partly on the back of stronger employment.
Improving confidence in the labour market helped US consumer confidence rise to its highest level in five months.
The S&P 500 consumer discretionary index pared its losses after the report and was down just 0.2 per cent. Supervalu, the grocery store operator, added 2.6 per cent to $9.03, department store owner Macy?s gained 1.7 per cent to $25.85 and clothing retailer Gap advanced 2.4 per cent to $21.22.
But the housing market remained grim. The S&P/Case-Shiller index of house prices in 20 cities showed US house prices fell for the third month running in September.
Dan Greenhaus, chief economic strategist at Miller Tabak, said 19 of the 20 cities showed a decline in prices for the month and he expected further declines before the end of the year.
However the S&P 500 homebuilders index edged up 0.6 per cent with Lennar gaining 1 per cent to $15.14 and DR Horton nudging up 0.5 per cent to $9.92.
The technology sector fell the most in the wider indices, down 1.3 per cent.
Google dropped 3.2 per cent to $563.37 as the European Union said it had opened a full investigation after allegations from smaller online search providers that the US company had abused its dominant market position.
There was also continued speculation that Google would bid for the GroupOn discount website and it was reported that a possible offer could be between $5bn and $6bn.
Comcast lost 0.9 per cent to $20.03 after it found itself at the centre of a dispute about how it handles video traffic on the internet as US regulators work to prepare ?net neutrality? rules.
The cable company was accused late on Monday of asking for fees for the first time in return for carrying internet movies and other traffic for Level 3, which provides streaming services. Shares in Level 3 were flat at $1.
Ebay fell 3.8 per cent to $29.09 after it was downgraded by analysts at Piper Jaffray who said the auction site will lose market share in the next two years.
But there was a technology bright spot. Research in Motion jumped 6 per cent to $62.51 after analysts at Jeffries Group upgraded the BlackBerry maker,?citing the company?s new QNX operating system.
In deals news, shares in Baldor Electric Companyput on 40.2 per cent to $63.24 after the maker of industrial motors agreed to be bought by Swiss-Swedish group ABB. The bid, worth $4.2bn including debt, will pay investors $63.50 a share, a 41 per cent premium to Monday?s closing price.
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