Doubts over whether Wall Street can keep on climbing to new heights held back stock markets around the world Tuesday.
Major indexes in Europe and Asia closed lower while the U.S. Dow industrials average and Standard & Poor's 500 were steady in early afternoon trading New York time.
Investors remained cautious a day after the Dow broke 16,000 and the S&P breached the 1,800 mark — both firsts. The Dow Jones industrial average has surged 900 points since early October and Wall Street has not suffered a significant pullback in the past two years even though the U.S. economic recovery has been painfully slow.
Comments from influential investor Carl Icahn have reinforced jitters that stock prices are out of step with reality.
"Traders appeared flustered by US city sage Carl Icahn's warning of equity overvaluation," said Alastair McCaig, market analyst at IG.
In Europe, Britain's FTSE 100 fell 0.4 percent to 6698.01 while France's CAC 40 lost 1.1 percent to 4272.29. Germany's DAX was off 0.3 percent at 9,194.29 after hitting a record high Monday.
A stronger than expected reading for the German ZEW index of optimism among investment analysts was not enough to push shares into positive territory. Top European Central Bank official Peter Praet said in a speech that the current recovery in Europe remains "pale and sickly."
In the U.S., the Dow was up 0.1 percent at 15,997 while the S&P rose the same rate to 1,793.
Earlier in Asia, Japan's Nikkei 225 stock average closed down 0.3 percent at 15,126.56 and China's Shanghai Composite Index dropped 0.2 percent to 2,193.13. Australia's S&P/ASX 200 lost 0.6 percent to 5,352.90. Hong Kong's Hang Seng was little changed at 23,657.81 while Seoul's Kospi rose 1 percent to 2,031.64.
Stocks around the world had been buoyant over the past few trading sessions, largely in the slipstream of developments on Wall Street. The catalyst was Janet Yellen, who is slated to become the next Fed chairman. She expressed strong support for the Fed's low interest-rate and bond buying policies aimed at stimulating U.S. growth. Near-zero rates on fixed-income investments have pushed investors into riskier but potentially higher yielding assets such as stocks. That has fed the market's climb — but left investors on edge for signs the central bank will start reducing its purchases of government bonds and mortgage securities totaling $85 billion a month.
The euro was up 0.2 percent at $1.3528 down modestly at $1.3502 while the dollar rose 0.1 percent to 100.09 yen. A barrel of benchmark New York crude fell 12 cents to $92.91 a barrel.