Both the S&P 500 and the Nasdaq eked out record closing highs after a topsy-turvy Thursday on Wall Street, 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 (CSCO.O) weighed on the benchmark.

Both the S&P and Nasdaq (.IXIC) had rebounded by late morning though, with the latter supported by Nvidia (NVDA.O). The chipmaker jumped 8.2% after beating quarterly estimates and forecasting strong fourth-quarter revenue. read more

The S&P consumer discretionary sector (.SPLRCD) led gains among its peers, ascending 1.5% as positive retail earnings from Macy's and Kohl's joined upbeat reports from Walmart Inc (WMT.N) and Target Corp (TGT.N) earlier this week.

Peer Kohl's Corp (KSS.N) advanced 10.6% after raising its forecast. read more

The S&P 500 retailing index (.SPXRT) gained 2.8% to break its record peak for the third 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 (.DJI) fell 60.1 points, or 0.17%, to 35,870.95, the S&P 500 (.SPX) gained 15.87 points, or 0.34%, to 4,704.54 and the Nasdaq Composite (.IXIC) 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 5.5% after it forecast current-quarter revenue below expectations due to supply chain shortages and delays. read more

Visa Inc (V.N) declined for a second day, with its 0.8% fall taking it to its lowest close since Feb. 3, after news that Amazon.com Inc (AMZN.O) may pare back its relationship with the payments company. read more

Volume on U.S. exchanges was 11.09 billion shares, compared with the 11.14 billion average for the full session over the last 20 trading days.

The S&P 500 posted 40 new 52-week highs and nine new lows; the Nasdaq Composite recorded 103 new highs and 407 new lows.

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