Optimism about equity valuations following a surprise takeover of HJ Heinz was tempered by reports showing economies in Europe and Japan were weaker than expected.
Shares of HJ Heinz soared, last up 19.8 percent to $US72.45 as Warren Buffett's Berkshire Hathaway and 3G Capital agreed to buy the ketchup maker for $US72.50 a share, or $US28 billion including debt.
The deal underpinned the notion that the recent gains on Wall Street are justified even as reports today showed that Germany, Europe's largest economy, posted a larger-than-anticipated contraction in the fourth quarter.
"The only reason a company buys another company is because they see an upside. Even though we are at multiyear highs, this kind of activity shows that there is more room for a rally, feeding optimism to the market," Randy Frederick, director of trading and derivatives at Charles Schwab, told Reuters.
In afternoon trading in New York, the Standard & Poor's 500 Index advanced 0.14 percent, while the Nasdaq Composite Index eked out a gain of 0.01 percent. The Dow Jones Industrial Average slipped 0.04 percent.
For others, there was clear evidence of the euro zone's struggles. Shares of General Motors fell, last down 2.5 percent, after the car maker posted fourth-quarter profit that fell short of expectations because of widening losses in Europe and lower prices in North America.
The eurozone's gross domestic product dropped 0.6 percent in the final three months of 2012 from the previous three months, according to the European Union's statistics office.
Fourth-quarter GDP also contracted in Germany, France, and Italy, shrinking 0.6 percent, 0.3 percent, and 0.9 percent, respectively. All contractions exceeded the median forecasts of economists polled by Bloomberg.
"The outlook for 2013 remains subdued," Peter Vanden Houte, an economist at ING Group NV in Brussels, told Bloomberg.
"While a gradual improvement of the world economy is likely to support European exports, domestic demand is bound to remain very weak as fiscal tightening and rising unemployment will take their toll on household consumption."
Europe's Stoxx 600 Index ended the session with a 0.2 percent decline from the previous close. Stocks also fell in Frankfurt, Paris and London, dropping 1.1 percent, 0.8 percent and 0.5 percent, respectively.
The economic picture in Japan was not much better as the country's GDP unexpectedly declined an annualised 0.4 percent in the last quarter.
Shares of US Airways Group sank, last down 7.2 percent, after it and AMR Corp's American Airlines announced their plans for an $US11 billion merger that will create the world's largest air carrier.