“There’s no easy solution to problems in Europe,” said Jeff Schwarte, portfolio manager at Principal Global Investors. “Investors are growing frustrated—the U.S. market fundamentals are pretty strong, but we’re pulled down by [Europe].”

Still, Schwarte said the “biggest challenge” for the U.S. market is the "fiscal cliff at the end of the year,” where a series of stimulus programs and tax cuts expire.

“But longer-term oriented investors would benefit from an entry point around the summer,” advised Schwarte, adding that he favors consumer discretionary, home improvement and tech stocks.

Verizon and AT&T were among the top performers on the blue-chip index after Credit Suisse raised its rating on both telecom companies to "outperform" from "neutral." Meanwhile, Leap Wireless International surged after news AT&T had held talks to buy the smaller rival .

Apple was in the spotlight after Foxconn CEO reportedly said they are "making preparations" for an iTV but manufacturing and development has not started, according to the China Daily. The stock finished slightly lower.

Netflix jumped after the video-streaming company's director Jay Hoag bought 200,000 shares of the firm.