The Dow and S&P 500 indexes fell on Wednesday after data showed a second straight month of declining U.S. retail sales, though results from technology bellwether Intel Corp helped limit losses on the Nasdaq.
Stocks wavered following six sessions of gains as investors also looked ahead to a statement from the Federal Reserve later Wednesday about the outlook for the U.S. economy.
Sales at U.S. retailers fell for a second month in June, pulled down by weak receipts at automotive dealers and gasoline stations in a reminder that the economy continues to face strong headwinds.
Other data showed U.S. business inventories rose 0.1 percent in May, slightly narrower than the 0.3 percent increase that had been expected as sales fell for the first time since March 2009.
Intel , a Dow component, climbed 4.5 percent to $21.96 a day after it posted better-than-expected results that allayed concerns about a slowdown in technology business spending.
With the S&P 500 index up about 8 percent from a recent intraday low on July 1, investors are scrutinizing early second-quarter earnings reports for evidence that the rally can be sustained.
Earnings have been much better than expected, but weak sales suggest that people are expecting a slowdown in the second half of the year, said Bruce Bittles, chief investment strategist at Robert W. Baird in Nashville.
The Dow Jones industrial average <.DJI> was down 32.70 points, or 0.32 percent, at 10,330.32. The Standard & Poor's 500 Index <.SPX> was down 5.88 points, or 0.54 percent, at 1,089.46. The Nasdaq Composite Index <.IXIC> was up 0.16 points, or 0.01 percent, at 2,242.19.
The Fed's economic forecasts will be released alongside the minutes from its most recent monetary policy meeting. Some are expecting Fed officials to cut their outlook for U.S. economic growth, tracking recent moves by Wall Street economists.
It's problematic if the Fed is concerned about the economy slowing in the second half of the year, but earnings have removed the double-dip scenario that was on everyone's lips and created a lot of pessimism, Bittles said.
In Washington, U.S. Senate Democrats on Tuesday appeared to nail down the votes needed to approve a historic overhaul of U.S. financial regulations and set up a final vote by the end of the week.
Also late Tuesday, fast food chain operator Yum Brands Inc gave a full-year profit outlook that was below expectations. The stock fell 2.9 percent to $40.33.
(Editing by Padraic Cassidy)