NEW YORK (TheStreet) -- U.S. stocks settle lower on Wednesday following Tuesday's record close for the S&P 500. Investors showed a preference for defensive plays in utility and telco stocks. Traders noted an increasing lack of breadth in new records while volumes were light.

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The Dow Jones Industrial Average was 0.25% lower to 16,633.18, while the S&P 500 lost 0.11 to 1,909.78. The Nasdaq slid 0.28% to 4,225.08. Financial stocks and small caps were underperforming the broader index.

  • International markets were flat to higher following upbeat U.S. data from Tuesday. The FTSE 100 was 0.09% higher, the DAX was 0.02% lower, the Nikkei 225 closed up 0.24%, and the Hong Kong Hang Seng finished higher by 0.59%.
  • Allergan(AGN) - Get Report and Valeant Pharmaceuticals (VRX) dropped 5.4% and 2.3%, respectively. Valeant announced that it is increasing its merger proposal for Allergan by $10 per share to $58.30.
  • Retailers such as Dollar General(DG) - Get Report and Lowe's(LOW) - Get Report retreated 3% and 2.2%, respectively.
  • Twitter(TWTR) - Get Report popped 10.7% after the stock was raised to "buy" from "neutral" at Nomura. "We believe that the market has now priced in the expectation that Twitter remains a niche social media product. We believe risk / reward is much more favorable now ..." noted the Nomura analysts.
  • Toll Brothers(TOL) - Get Report added 2.1% after posting on Wednesday fiscal second-quarter profit of $65.2 million, or 35 cents a share, up from year-earlier earnings of $24.7 million, or 14 cents a share.
  • Michael Kors (KORS) was 1.3% higher after giving optimistic full-year guidance. Michael Kors exceeded quarterly earnings expectations by 10 cents at 78 cents a share as same-store sales jumped more than 26%.
  • Goldman Sachs(GS) - Get Report President Gary Cohen said flagging global economic growth rather than regulation was the culprit for falls in trading volumes at the bank and across the industry. The bank's shares closed flat.
  • Facebook's(FB) - Get Report proposed acquisition of WhatsApp is facing a potential antitrust review in Europe, though it has already been approved in the U.S. The social media stock was 0.05% higher.
  • Sam Stovall, managing director of U.S. equity strategy at S&P Capital IQ, wrote in a client note that the S&P 500 has regained its bullish bias since June 2013, climbing more than 18%, and is now 13% higher than its pre-taper peak. Yet things are certainly not "back to normal," said Stovall. The yield on the 10-year note is more than 80 basis points above where it was on April 30, 2013 and higher-yielding stocks are still lagging well behind their lower-yielding brethren. "When screening for high-yielding investment candidates, we recommend that investors don't 'yield to temptation' by stretching for income and turning a blind eye to valuations and volatility."
  • Stocks rose Tuesday with the S&P 500 hitting a record closing high amid a raft of positive economic data, including rising consumer confidence and service sector expansion.

-- By Jane Searle, Andrea Tse and Joe Deaux in New York

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