S&P 500 fails to break through again

• Dow%2C S%26P 500%2C trade lower%3B Nasdaq shows a small gain
• European markets see declines
• Oil futures for May delivery move lower

Worries about Europe weighed on the stock market Wednesday, keeping the Standard & Poor's 500 stock index from breaking through its 2007 closing high for a second day.

At the close Wednesday, the broad market index was less than 3 points away from a record. The S&P 500 fell 0.92 points or 0.05% to 1,562.85.

The Dow Jones industrial average was off 33.49 points or 0.23% to 14,526.16. The Nasdaq, bucking the trend, was up 4.04 points or 0.12% to 3,256.52.

Stocks were lower most of the day. Investors were watching to see whether Cyprus can restore confidence in its banking system. They were also keeping an eye on Italy, where political parties are struggling to form a new government in the third-largest economy in the eurozone.

Cyprus is working out details for how to reopen its banks after a nearly two-week shutdown.

In Italy, center-left leader Pier Luigi Bersani failed to get support from the anti-establishment 5 Star Movement to form a new government.

Political gridlock in Italy has been a major concern following inconclusive results of elections in late February. Investors worry that the country won't follow through with unpopular budget cuts, potentially undermining confidence in the euro.

European markets fell. Benchmark indexes ended lower with Britain's FTSE 100 finishing 0.2% lower to 6,387.56. Germany's DAX 30 index ended down 1.2% to 7,789.09, and France's CAC 40 index closed down 1% to 3,711.64. Italy's main stock index slumped 1.2%.

The worries hit Europe's bond markets especially hard. Borrowing rates for Italy and Spain shot higher, which means investors' confidence in the financial stability of those countries is weakening. Rates for more stable European countries, such as Germany and France, fell as investors bought their bonds.

Bad news out of Europe and good news from the U.S. have tossed the stock market around over the past week. "There are still plenty of worries about (Europe's) banking system," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade. "But the U.S. really is on a nice little roll."

In the market for U.S. government bonds, the yield on the 10-year Treasury note dropped to 1.85%. That's a sharp fall from 1.91% late Tuesday and above 2% just a week ago, suggesting that investors are moving money into ultra-safe assets.

Down early, gold prices reversed course at midday, rising 0.6% to $1,604.60.

All 10 industry groups in the S&P's 500 index fell, led by banks and industrial companies. The groups with the smallest losses were utilities and health care, which investors tend to buy when they're feeling risk-averse.

The S&P 500 closed within two points of its all-time high of 1,565 on Tuesday, helped by economic reports showing rising home prices and gains in orders for manufactured goods. The stock index hit that peak on Oct. 9, 2007, before the Great Recession and a financial crisis roiled financial markets.

Cliffs Natural Resources, an iron ore mining company, plunged 14%, the biggest loss in the S&P, after a Wall Street analyst downgraded the stock from equal-weight holding recommendation to underweight.

SAIC shares jumped 4% after the security and communications technology provider reported a fourth-quarter profit that was better than analysts were expecting. SAIC also announced a special dividend of $1 per share.

On Tuesday, the Dow rose 111 points, 0.8%, to finish at 14,559.65. The S&P 500 index finished up 0.8% to 1563.77. The tech-heavy Nasdaq composite index rose 0.5% to 3,252.48.

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Japan's Nikkei 225 index edged up 0.2% to close at 12,493.79. Hong Kong's benchmark Hang Seng index rose 0.7% to 22,464.82 while South Korea's Kospi gained 0.5% to 1,993.44. In mainland China, the Shanghai Composite index closed up 0.2% to 2,301.26.

In energy markets, benchmark oil for May delivery rose 15 cents to $96.49 a barrel in electronic trading on the New York Mercantile Exchange . The contract rose $1.53 to settle at $96.34 on the Nymex on Tuesday.

Contributing: USA TODAY's Ray Goldbacher; The Associated Press