In pre-market trading, U.S. stocks were uneven as analysts expected a day of volatile trading following the terrorist attacks in Paris. By the opening bell, major indices dropped slightly while retail stocks took steeper declines as investors dropped out of the sector following weak earnings reports last week of some key companies, including Nordstrom Inc. and Macy’s Inc.

The Dow Jones Industrial Average and the S&P 500 were flat at 17,240 and 2,025, respectively. The S&P 500 Retailing Industry Group index fell 0.6 percent to 1,215.

By midday, the Dow and the S&P 500 were both up 0.6 percent to 17,349 and 2,034, respectively. But retail stocks were sharply down. The S&P 500 Retailing Industry Group index was off 0.6 percent to 1,215.

Notable decliners included Macy’s Inc., which was down 2.6 percent to $38.10, and Aéropostale Inc. with a 6.2 percent drop to 68 cents. Dillard’s Inc., was trading down 9.4 percent to $70.19 after disappointing quarterly results. And Urban Outfitters Inc. was down 9.6 percent to $22.15 as investors had trouble digesting an acquisition of a pizza chain by the specialty retailer.

In Europe, major indices were mixed, and so was Asia. Earlier in the day, the Nikkei 225 lost 1 percent to close at 19,394 while the Hang Seng dropped 1.7 percent to 22,011. The Asia Dow declined 1.4 percent to 2,722. In China, the Shanghai Index gained 0.7 percent to 3,607.

IHS Global Insight chief European and U.K. economist Howard Archer said in a research note over the weekend that the economic implications of the Paris attacks “could certainly have a significant negative impact on consumer confidence, at least in the near-term, primarily in France but also elsewhere in Europe, as people in many other countries will be wondering if they could be the next to suffer such an atrocity.”

Archer said there could also be an “adverse impact on tourism in some European countries where people think attacks are most likely to occur — not just in France.” Still, Archer said despite the attacks, economic activity tends to be resilient. “The U.K., Spain and France have all seen their economies little damaged by terrorist atrocities in the past,” he added.

Archer said that within equity markets, “obviously the tourism and travel sector is most likely to be adversely affected by the French terrorist attacks and they have seen general weakness. There could be some boost to defense stocks. There has been some move into safer assets, notably U.S. Treasuries, gold and some European bonds.”

In the U.S. retail sector, there is growing concern that the department store segment will see extremely weak margins as it is forced to slash prices to clear bloated inventory. Dana Telsey, chief executive officer of Telsey Advisory Group told clients in her morning note that “higher-than-anticipated inventory is likely to lead to heightened promotions and margin pressure for the department stores this holiday season.”

Moreover, the lack of consumer excitement for apparel purchasing shows that the category “needs more product innovation,” Telsey said, adding that fashion apparel “is seeing more competitive pressure from more affordable offerings from fast fashion and off-price players.”

There are other factors impacting apparel spending, which include an ongoing shift of spending to autos and dining out. Department stores as well as specialty apparel stores are being negatively impacted by the negative effect of a strong dollar on tourism spending. Eric Beder, equity analyst at Wunderlich Securities Inc., said in his research note this morning that he has concerns about Abercrombie & Fitch Co., which reports results Friday.

“We believe that while there was material progress made [in the third quarter], especially at Hollister, and the company has slowly increased its pricing, there is still tremendous uncertainty over both [foreign currency exchange] and tourist-driven traffic at key locations,” he said. “Further, we believe warmer weather did not help players, such as Abercrombie, that moved up fashion-driven shipments of outerwear and colder-weather gear.”

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