The weakest sectors in the broad market were consumer cyclicals, capital goods and conglomerates. Only consumer non-cyclicals posted gains.
Wednesday's economic data was lackluster. The Commerce Department reported that retail sales fell by a slightly less than expected 0.2% in May, after falling by a downwardly revised 0.2% in April amid a drop in gasoline prices, an employment slowdown and tepid wage increases. Economists surveyed by
expected that sales contracted by 0.3% in May.
Retail sales, excluding autos, fell 0.4% in May, after declining 0.3% in April.
Overall, eight out of 13 categories in the report saw declines in consumption in May, said Andrew Wilkinson, chief economic strategist at Miller Tabak, who added that the April downward revision was "adding insult to injury."
"The May sales report and the April revision throw fuel on the fire for those dovish members calling for the need for more policy stimulus in the face of a growing eurozone crisis," said Wilkinson.
The Labor Department reported that the producer price index fell a bigger-than-expected 1% in May after falling 0.2% in April amid falling commodity prices. The decline was the largest since July 2009. Economists surveyed by
expected a fall of 0.7% for May.
"If this dis-inflationary trend becomes entrenched, it may actually provide some justification for aggressive monetary policy action as the Fed attempts to avert a deflationary spiral," said Millan Mulraine, senior U.S. strategist at TD Securities.
The May producer price index, excluding the food and energy components, rose 0.2% for the second straight month.
The FTSE 100 in London settled up 0.2% and the DAX in Germany fell 0.1% as Italy's borrowing costs jumped at a sale of €6.5 billion ($8.1 billion) of bonds amid chatter than Italy will follow Spain's lead in seeking a eurozone bailout -- speculation that Italian Prime Minister Mario Monti has denied.
Contagion fears across Spain and Italy could "cause some market turmoil over the next few months," said Dwight Johnston, economist at the California and Nevada Credit Union League.
In other economic news, eurozone industrial production fell 0.8% in April, the sharpest decline in four months, but still less than the expected 1% decline, according to a survey of economists by