US markets close flat after Dow jumps past 13,000

The Dow Jones Industrial Average closed off a bare 1.44 points (0.01 per cent) at 12,981.51.

But the broad-based S&P 500 added 1.85 (0.14 per cent) to 1,367.59, its best finish since early June 2008.

The tech-rich Nasdaq Composite meanwhile gained 2.41 points (0.08 per cent) to 2,966.16.

After losing 100 points at the opening, the Dow regained ground and moved well into the black helped by a buoyant report on the housing market to hit 13,027 in late afternoon trade before profit taking took it back down.

The last time the Dow closed above 13,000 was May 19, 2008, when markets were plunging as the US financial crisis spread.

Helping trade was a report from the National Association of Realtors that pending home sales rebounded 2.0 per cent in January, twice as much as Wall Street expected.

Elizabeth Harrow of Schaeffer's Investment Research said that Berkshire Hathaway investment "oracle" Warren Buffett also boosted sentiment when he told CNBC television that "Equities are still cheap relative to any other asset class."

Banks led the way higher partly driven by the housing market news. Bank of America and JPMorgan Chase both rose 2.0 per cent, Wells Fargo added 2.8 per cent, and American Express, 1.7 per cent.

Motorola Solutions, the equipment maker created from a 2011 split of Motorola, surged 1.5 per cent after announcing it bought back $1.2 billion of its shares from corporate raider Carl Icahn.

Billionaire Buffett's Berkshire Hathaway B shares rose 0.3 per cent after the octogenarian tycoon said a successor has been chosen to lead the company, though not identifying just who.

Shares in cruise ship operator Carnival, already under pressure after one ship sank off the coast of Italy in January, slipped 0.03 per cent after another vessel was reported adrift in the Indian Ocean following a generator fire.

Bond prices rallied. The yield on the 10-year Treasury fell to 1.92 per cent from 1.98 per cent on Friday, while the 30-year yield dropped to 3.04 per cent from 3.10 per cent.

Bond prices and yields move in opposite directions.