US equity markets finished sideways for another week as concerns about Washington budget negotiations and the status of the Federal Reserve's stimulus program kept investor enthusiasm at bay.
Trading followed an erratic path during the week, with new multi-year peaks in the Dow and S&P indexes followed by big declines.
Market watchers have had plenty to worry about, including the potential end of the Federal Reserve's stimulus program and the possibility of deep government spending cuts that could take effect March 1.
But the net effect has been almost no significant change for the past three weeks for the main indices.
"Maybe the market has made some sort of short-term top," said Mace Blicksilver of Marblehead Asset Management.
The Dow Jones Industrial Average inched about 0.2 percent higher to close the week out at 14,000.57.
The S&P 500 recorded its first weekly decline of the year, dropping 0.3 percent to 1,515.60, while the tech-rich Nasdaq Composite Index slipped 0.9 percent to 3,161.82.
All three indices appeared headed for a sizable drop through Thursday thanks to the release of the January minutes of the Federal Reserve's Open Market Committee meeting.
For the second month in a row, the minutes revealed an open debate within the Fed on whether to maintain its $85 billion per month asset purchases.
But by Friday, the market concluded it had "misinterpreted" the minutes, said Peter Carrillo, chief market economist at Rockwell Global Capital.
Cardillo expects Federal Reserve Chairman Ben Bernanke to reaffirm the central bank's stimulus measures in appearances before congressional committees next week. The testimony should serve as a buying opportunity, he said.
"I wouldn't be surprised to see the S&P trend as high as 1,540," Cardillo said.
That would put it just shy of its all-time record close of 1,565.15 on October 9, 2007.
Another source of angst is a fall in consumer spending power in the wake of the January two percent increase in payroll taxes and more expensive gasoline.
A survey of consumers released this week by the National Retail Federation showed that nearly half were planning to spend less in the wake of the payroll tax increase.
"A smaller paycheck due to the fiscal cliff deal early last month, higher gas prices, low consumer confidence and ongoing uncertainty about our nation's fiscal health is negatively impacting consumers and businesses across the country," said NRF president and chief executive Matthew Shay.
The world's biggest retailer, Walmart, said this week it was continuing to monitor consumer spending, as it projected flat US sales for the current quarter.
At the same time, Walmart reported higher overall profits and boosted its dividend. Shares of Walmart ended the week 1.6 percent higher.
Michael James, managing director of equity trading at Wedbush Morgan Securities, characterized the effect of higher payroll taxes on retail equities as a short-term "pause."
Markets were also increasingly focused on the possibility of billions in across-the-board spending cuts due to take effect March 1 unless Washington intervenes.
The cuts, known as the "sequester", would slash defense spending by $55 billion and non-defense discretionary spending by $27 billion.
The Bipartisan Policy Center in Washington estimates that one million jobs could be lost if the sequester were allowed to unfold in full.
James expects the market next week to react to different "smoke signals" from Washington on a potential compromise, or the lack thereof.
Yet the market's relative buoyancy remains a sign that Wall Street doesn't view the worst-case scenario as likely, he said.
"If something doesn't get done, it will be a big deal," James said. "The expectation is that something will get worked out."
Economic data upcoming next week: Case-Shiller home prices, new home sales, and US consumer confidence (Tuesday); January durable goods orders (Wednesday); the second estimate of fourth quarter GDP (Thursday); and personal income and expenditures, the ISM manufacturing index for Febuary, February car sales, and construction spending in January (Friday).