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The major averages spent some time on both sides of their flat lines on Wednesday before ending little changed. The S&P 500 settled on its flat line with six sectors finishing in the red, while the Russell 2000 (+0.3%) displayed relative strength throughout the session.

Although stocks finished on a flat note, the early indication suggested the market could be in for a rough day as economic data from the eurozone and domestic corporate news weighed.

On the economic front, Germany reported its second monthly decline in factory orders (-3.2% versus expected 1.0%; prior -1.6%), while the Italian economy slipped into recession following its second consecutive quarterly GDP contraction (-0.2%; previous -0.1%).

Back at home, two potential acquisitions were called off with 21st Century Fox (FOXA 32.33, +1.03) terminating its pursuit of Time Warner (TWX 74.24, -10.95) and Sprint (S 5.90, -1.38) withdrawing its offer for T-Mobile (TMUS 31.06, -2.85).

In addition, shares of Walgreen (WAG 59.21, -9.91) plunged 14.3%, which also contributed to the early weakness. The drugstore operator said it will acquire the remaining 55.0% stake in Alliance Boots that it does not currently own and that it will not move its corporate headquarters out of the United States.

Despite the opening weakness, the S&P 500 was quick to find support at its 100-day moving average. The index breached that level for the first time since mid-April, but was able to claw back to its flat line in short order. However, extending the rebound proved challenging as a handful of influential sectors like consumer discretionary (-0.3%), health care (-0.1%), industrials (-0.5%), and technology (-0.2%) weighed.

Notably, the industrial sector lagged throughout the session amid weakness in defense contractors and transport stocks. The PHLX Defense Index lost 1.0%, while the Dow Jones Transportation Average fell 0.6% to extend its week-to-date loss to 1.4%. Almost all 20 components of the bellwether complex posted losses with the lone bright spot appearing among airlines. Alaska Air (ALK 42.94, +0.22) and JetBlue (JBLU 10.92, +0.14) added 0.5% and 1.3%, respectively.

Elsewhere, the health care sector posted a slim loss, while biotech stocks displayed some intraday volatility. The iShares Nasdaq Biotechnology ETF (IBB 251.82, +0.18) ended just above its flat line after alternating between gains and losses during the session.

On the upside, yesterday's weakest sector—energy (+0.4%)—seized the lead at the open, but surrendered a significant portion of its gain during the afternoon.

Outside of energy, financials (+0.4%), materials (+0.7%), and consumer staples (+0.9%) were the only sectors to register gains. The materials space drew strength from mining stocks. The Market Vectors Gold Miners ETF (GDX 26.69, +0.59) gained 2.3%, whereas gold futures jumped 1.8% to $1308.30/ozt.

Treasuries held gains throughout the session, but the 10-yr note relinquished roughly two-thirds of its advance by the close. The benchmark 10-yr yield slipped two basis points to 2.47%.

Participation was a bit below average with fewer than 680 million shares changing hands at the NYSE floor.

Economic data was limited to the June Trade Deficit and the MBA Mortgage Index:

• The U.S. trade deficit narrowed to $41.50 billion in June from an upwardly revised $44.70 billion (from $44.40 billion), while the consensus expected an increase to $45.20 billion 
  • According to the advance estimate for Q2 2014 GDP, the BEA assumed the trade deficit widened to roughly $45.10 billion in June. The fact that the deficit was much smaller than the BEA expected suggests that the new trade balance will contribute positively in the second estimate 
  • The goods deficit fell to $60.30 billion in June from $63.30 billion in May 
  • The services surplus remained at $18.70 billion 
  • Exports increased by 0.1% in June, while imports declined 1.2% 
• The weekly MBA Mortgage Index rose 1.6% to follow last week's 2.2% decline 

Tomorrow, weekly initial claims (consensus 308K) will be released at 8:30 ET, while the Consumer Credit report for June (consensus $15.80 billion) will cross the wires at 15:00 ET.

• S&P 500 +3.9% YTD 
• Nasdaq Composite +4.3% YTD 
• Dow Jones Industrial Average -0.8% YTD 
• Russell 2000 -3.1% YTD