Stocks Stumble to Mixed Close

Updated from 4:12 p.m. EST

Stocks endured another wobbly session Wednesday before ending narrowly mixed, as traders weighed a strong outcome from the Federal Reserve's first loan auction against a lowered ratings outlook for two big bond insurers.

The Dow Jones Industrial Average wavered between positive and negative territory, ultimately ending down 25.20 points, or 0.19%, to 13,207.27. The S&P 500 slipped 1.98 points, or 0.14%, to 1453.

The tech-heavy Nasdaq Composite managed to gain 4.98 points, or 0.19%, to close at 2601.01. The index was buoyed by gains in Yahoo! (YHOO Quote), Amazon.com (AMZN Quote), Research in Motion (RIMM Quote), and Intel (INTC Quote).

"There is a lot of volatility, and instead of stabilizing, we keep seeing more selling," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "We should be seeing at least a small Santa Claus rally. It's disheartening that there are no buyers out there."

Breadth was mixed Wednesday. On the New York Stock Exchange 3.33 billion shares changed hands, as decliners edged advancers by a 9-to-7 margin. Volume on the Nasdaq reached 1.83 billion shares, with winners matching losers.

Among subsector indices, the Dow Jones Transportation led laggards with a 1.7% decline. The NYSE Financial Index, the S&P Retail Index, and the Philadelphia Housing Sector Index also finished in the red.

Stocks started on an upbeat note, but early gains unraveled after Standard & Poor's cut its outlook on MBIA (MBI Quote) and Ambac (ABK Quote) to negative from stable. That sent shares of MBIA down 2.5% to $27.01. Ambac rose 1.9% to $27.50 after it said it was taking measures to increase capital and regain a stable rating.