U.S. retail sales were unchanged in April as households cut back on purchases of cars and other big-ticket items and import prices fell for a 10th straight month in April and business inventories barely rose in March.
The data suggested to some investors that the U.S. economy was struggling to rebound strongly enough for the Federal Reserve to raise interest rates before September.
"You're now heading from an earnings-centric market to a macro-focused market," said Andrew Frankel, co-president of Stuart Frankel & Co in New York. "People seem to be in watch mode as they get an understanding of what's next."
In particular, investors are waiting for inflation numbers and the next jobs report in coming weeks, said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio.
However, Brian Fenske, head of sales trading at ITG in New York, said he was seeing solid volume of investors adjusting their portfolios after earnings season.
"I'm seeing more healthy activity which is buying, selling and shorting stocks," said Fenske. "I'm seeing a return of conviction."
The S&P's information technology index <.SPLRCT>, was the best performer with a 0.5 percent increase.
The S&P utilities index <.SPLRCU> was the worst performer, with a 1.1 percent drop. Duke Energy (>> Duke Energy Corp) weighed most on that sector and AES Corp (>> AES Corp) fell 2.5 percent drop after it priced a secondary share offering.
"It's a gauge of people's perspectives as to what the Fed will do next," said Frankel, adding that utilities are in favor if people think the Fed will stall on interest rate hikes.
The Dow Jones industrial average <.DJI> fell 7.574 points, or 0.04 percent, to 18,060.49, the S&P 500 <.SPX> lost 0.64 points, or 0.03 percent, to 2,098.47 and the Nasdaq Composite <.IXIC> added 5.50 points, or 0.11 percent, to 4,981.69.
DuPont (>> E I Du Pont De Nemours And Co) shares fell 6.8 percent to $69.33 after it won a proxy fight against Nelson Peltz's Trian Fund Management. The stock was the biggest drag on the Dow Jones industrial average.
Macy's (>> Macy's, Inc.) fell 2.4 percent to $63.73, while Ralph Lauren (>> Ralph Lauren Corp) fell 3 percent to $129.18 after they reported results.
Pall Corp (>> Pall Corporation) rose 4.4 percent to $123.89 after Danaher (>> Danaher Corporation) said it would buy the company in a $13.8 billion deal. Danaher was up 1.6 percent at $87.35.
Shares of pipeline company Williams Partners LP (>> Williams Partners L.P.) jumped 22.7 percent to $58.16 after Williams Cos (>> Williams Companies Inc) said it would buy its affiliate for about $13.8 billion.
Advancing issues outnumbered declining ones on the NYSE by 1,695 to 1,369, for a 1.24-to-1 ratio; on the Nasdaq, 1,369 issues rose and 1,345 fell for a 1.02-to-1 ratio favoring advancers.
The S&P 500 posted 13 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 64 new highs and 34 new lows.
About 6.1 billion shares changed hands on U.S. exchanges, compared with the 6.6 billion average for the last five sessions, according to data from BATS Global Markets.
(Editing by Saumyadeb Chakrabarty and Nick Zieminski)
By Sinead Carew
