* Investors watch struggling small-cap index
* Deere shares fall after results, Macy's up
* Dow down 0.6 pct, S&P 500 down 0.5 pct, Nasdaq down 0.7
(Updates to late afternoon trading)
By Caroline Valetkevitch
NEW YORK, May 14 U.S. stocks slipped on
Wednesday, a day after the Dow and S&P 500 hit record closing
highs, as small caps sold off and shares of retailers declined.
Leading declines on the Dow and S&P was IBM. Its
shares fell 1.7 percent to $188.94 after it said in a filing
that it expects hardware profit to be flat year-over-year in
Macy's dipped 0.5 percent to $57.55 after its sales
missed expectations. The S&P retail index
was down 1 percent.
Retailer Fossil Group Inc was the biggest
percentage decliner on the S&P 500 a day after it gave a
second-quarter profit outlook that was much lower than expected,
pressured by rising costs. Shares fell 9 percent to $101.45.
The Russell 2000 index of small-cap stocks dropped
1.4 percent, underperforming the three major indexes and
extending a divergence that has been pronounced throughout 2014.
Some analysts are concerned that persistent weakness in
small-caps could spread throughout the market.
The S&P is coming off three straight daily advances. On
Tuesday it climbed above 1,900 for the first time.
U.S. data showed potential signs inflation pressures may be
creeping up. Producer prices recorded their largest increase in
1-1/2 years in April as food prices surged.
"A lot of people are looking for evidence to confirm the
tough winter was the only reason we saw slowing," in activity,
said Joe Bell, senior equity analyst at Schaeffer's Investment
Research in Cincinnati, Ohio.
The Dow Jones industrial average fell 102.75 points
or 0.61 percent, to 16,612.69, the S&P 500 lost 9.56
points or 0.5 percent, to 1,887.89 and the Nasdaq Composite
dropped 28.40 points or 0.69 percent, to 4,101.764.
Deere & Co fell 2.3 percent to $91.43. The farm
equipment company cut its full-year sales outlook even as it
reported a better-than-expected quarterly profit.
Shares of online retailer Zulily Inc shot up 8.2
percent to $34.66, rebounding after dropping to a record low
earlier in the day following the expiration of its lockup
(Editing by Bernadette Baum; Editing by Nick Zieminski)