“Washington starts merging with Wall Street and Main Street at this point, and these are the things that are weighing on these folks’ minds,” New York-based Orlando said in a Feb. 19 phone interview. “You’ve had this terrific run in stocks to start the year and you’ve got insider selling disproportionately swamping buying. Are we due for a pullback at some point here over the next month or two? The answer’s probably yes.”

Executives at 153 companies in the S&P 500 unloaded shares between Feb. 11 and Feb. 15, with announcements of sales outnumbering buys by 17 to 1. The top sale that week was made by Google Chief Executive Officer Larry Page, 39, with a divestment worth more than $65 million.

Schmidt’s Plan

Google Chairman Eric Schmidt, 57, announced plans to sell as many as 3.2 million shares in the operator of the world’s most-popular search engine. The planned share sales, worth about $2.5 billion, represent about 42 percent of Schmidt’s holdings. The share sales are for Schmidt’s individual asset diversification and liquidity, Mountain View, California-based Google said in a Feb. 8 filing with the U.S. Securities and Exchange Commission.

“Insiders are not buying the current rally,” Pavilion’s Lapointe wrote in a Feb. 11 research note. “The recent gains have given them reason to sell their own stock. History tells us that high insider selling is usually followed by disappointing S&P 500 returns in the following months.”

Still, Lapointe wrote, “insider transactions do not move markets, large inflows do” and stocks should be supported over the short term by individual investors pumping money into equities.

Fund Flows

Investors deposited $37 billion into equity funds in January, the most since 2004, after pulling almost $300 billion out of stock funds since the market bottomed, estimates from the Washington-based Investment Company Institute show.

The S&P 500 has rallied more than 6 percent in 2013 and this week climbed to within 2.3 percent of its record reached in October 2007. The index has more than doubled since bottoming in March 2009 as the Federal Reserve conducted three rounds of bond buying to boost economic growth. The S&P 500 tumbled 1.2 percent yesterday, its biggest drop since November, as minutes from the Fed’s last meeting spurred concern the central bank was considering curtailing the stimulus efforts.

Earnings topped estimates at 71 percent of the 413 companies in the S&P 500 that have released earnings so far in the reporting season, with about 66 percent topping sales expectations.