U.S. Stocks Rose to Record Before Ending Week Unchanged

The Standard & Poor’s 500 Index climbed to a record, eclipsing a high set in April before retreating to end the week little changed.

Wal-Mart Stores Inc. dropped 2.8 percent after forecasting lower-than-estimated second-quarter earnings. Elizabeth Arden Inc. and World Wrestling Entertainment Inc. sank at least 27 percent as small-cap shares sank. The Nasdaq 100 Index gained 0.9 percent, as a 10 percent jump in Autodesk Inc. led technology shares higher. Cisco Systems Inc. rallied 5.9 percent as it projected earnings that topped analysts’ predictions.

The S&P 500 fell less than one point in the period to 1,877.86. The gauge added 0.4 percent in the last session after plunging 1.4 percent from an all-time high on May 13. The Dow Jones Industrial Average lost 92.03 points, or 0.6 percent, to 16,491.31 after earlier rising to a record. The Russell 2000 Index of small companies retreated 0.4 percent for a second week of losses.

“People started to position in front of things getting better, and when they didn’t, you had the mid-week selloff,” Todd Lowenstein, a fund manager who helps manage $16 billion at Highmark Capital Management Inc. in Los Angeles, said in a phone interview. “Now people are starting to place some bets again after some pullbacks. The weight of the evidence suggests that the economy will get better in the second half of the year, but there have been a lot of false starts in between.”

Dazed and Confused

The S&P 500 began the week with its best rally in a month and two consecutive record closes before selling in small-cap stocks spread to the broader market. The Russell 2000 had the biggest gain in two months on May 12 before falling 3.3 percent in the next three days. The week’s retreat left the small-cap gauge 8.8 percent below its record from March. While the Dow Jones Internet Index rallied 1.3 percent, it remains 17 percent below its March high.

A gauge of U.S. stock volatility known as the VIX dropped 3.7 percent to 12.44. The Chicago Board Options Exchange Volatility Index closed May 13 at the lowest level since August and has retreated 42 percent from a 14-month high in February.

“The market is dazed and confused right now,” Jeffrey Sica, who helps oversee more than $1 billion of assets as president of Sica Wealth Management in Morristown, New Jersey, said in a phone interview. “Investors are questioning whether or not the appreciation in the market that brought us to record highs is deserved or not, and whether it’s sustainable. There’s a tremendous amount of nervousness.”

Data Watch

Economic reports during the week showed slowing retail sales last month, as consumers were less inclined to ramp up spending again after March saw a release of pent-up demand caused by harsh winter weather. Separate data showed unexpected declines in manufacturing and consumer confidence, while home construction surged in April by the most in five months.

Five out of the 10 main S&P 500 industries declined for the week. Charles Schwab Corp. and E*Trade Financial Corp. sank at least 4.9 percent to pace a 0.9 percent drop among financial shares, the most of any group.

Wal-Mart dropped 2.8 percent to $77.01. The world’s largest retailer forecast second-quarter profit that missed analysts’ estimates as the company copes with slow sales in the U.S., especially at its Sam’s Club warehouse stores.

World Wrestling Entertainment slumped 35 percent to $11.27 for the biggest drop since its debut in 1999 and the third-steepest slide in the Russell 2000. The company said its new online TV network won’t make up for lost business until 2015.

Small Caps

Elizabeth Arden tumbled 27 percent to $25.61 for its worst week in five years. The maker of Elizabeth Taylor and Britney Spears brand perfumes posted a surprise loss and hired Goldman Sachs Group Inc. to help explore its options.

Fossil Group Inc. sank 7.8 percent to $101.90 for the biggest slide in the S&P 500. Second-quarter sales and earnings projections trailed analysts’ estimates amid a slump at North American malls.

Nordstrom Inc. soared 15 percent to a record $70.55. The largest U.S. luxury department-store chain posted profit that topped estimates.

Cisco rose 5.9 percent to $24.37. The company forecast fourth-quarter profit and sales that topped analysts’ estimates as orders in the U.S. are climbing on demand for networking machines to handle mobile-data traffic.

Autodesk’s 10 percent rally to $51.67 was its biggest weekly gain in two years, as the software supplier reported sales and earnings that exceeded estimates.

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