Both the S&P 500 and the Nasdaq eked out record closing highs after a topsy-turvy Thursday, as investors focused on upbeat retail and technology earnings which outshone hawkish inflation comments from a Federal Reserve policymaker.
By contrast, the Dow continued to play the laggard, registering its third decline this week, as Cisco Systems Inc weighed on the benchmark.
Inflation remains front and center for investors, and stock markets initially slipped after New York Federal Reserve Bank President John Williams said inflation is becoming more broad-based and that expectations for future price increases are rising.
Both the S&P and Nasdaq had rebounded by late morning though, with the latter supported by Nvidia. The chipmaker jumped after beating quarterly estimates and forecasting strong fourth-quarter revenue.
The performance helped the Philadelphia semiconductor index hit a fresh record high, before it too eased a touch.
The S&P consumer discretionary sector led gains among its peers, as positive retail earnings from Macy's and Kohl's joined upbeat reports from Walmart Inc and Target Corp earlier this week.
Macy's Inc surged after it raised its annual earnings guidance and flagged plans for a potential spinoff of its ecommerce division. Peer Kohl's Corp rose after raising its forecast.
The S&P 500 retailing index broke its intraday record every session this week, as investors viewed the earnings as a signal of robust consumer demand that has persevered through rising inflation, and that retailers were set for a strong holiday season.
"The consumer is stronger than expected; it's good news for the country as a whole. A stronger consumer is a reflection of a strong economic bounce," said Mike Zigmont, head of research and trading at Harvest Volatility Management in New York.
Still, concerns over further increases in price pressure, along with uncertainty over the Fed's plans for tightening have kept Wall Street muted this week.
"We definitely hit overbought territory and settling in is going to be healthy for us to take the next leg up," said Eric Metz, chief investment officer of Chicago-based SpiderRock Advisors.
"Outside of Fed policy or large earnings disappointments, I think there's some pretty stable footing underneath us, but markets can be fickle and so staying prudent is the name of the game right now."
The Dow Jones Industrial Average fell 59.71 points, or 0.17%, to 35,871.34, the S&P 500 gained 15.9 points, or 0.34%, to 4,704.57 and the Nasdaq Composite added 72.14 points, or 0.45%, to 15,993.71.
The Dow lagged its peers on steep losses in network gear maker Cisco, which tumbled after it forecast current-quarter revenue below expectations due to supply chain shortages and delays.
Visa Inc declined for a second day after news that Amazon.com Inc may pare back its relationship with the payments company.
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