Shares pared losses in the final hour of trading, with the Dow helped by a rally in Home Depot. For the week, the S&P 500 rose 2.3 percent while the Nasdaq rose 2.8 percent. It was the best weekly gain for both since the first week of the year. The Dow rose 2.1 percent.
Financial stocks were pressured on Friday by a pair of disappointing bank results and a delay in closing a large bank deal.
Weak retail sales and consumer sentiment data, suggesting the economy lost momenturm, also weighed on stocks.
The string of discouraging data indicates that equities could be vulnerable to a pullback, especially following a rally that has taken the S&P 500 up 11.4 percent so far this year. Telecom and healthcare, two defensive groups, were among the few S&P sectors in positive territory.
"We're due for choppiness, given the run we've had, especially since the strong data we've seen recently looks increasingly misleading," said Hank Herrmann, chief executive of Waddell & Reed Financial Inc in Overland Park, Kansas.
"We're moving at a slower pace, and those who got overly excited about GDP growth are probably pulling in their horns a bit."
On Thursday, the Dow and the S&P 500 closed at all-time highs.
Both JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) were lower after reporting results, with JPMorgan hit by a decline in revenue and Wells Fargo by a reduction in home loans. Shares of Wells dropped 0.8 percent to $37.21 while JPMorgan, a Dow component, was off 0.6 percent at $49.01.
"The numbers weren't terrible, but also not terribly inspiring," said Herrmann, who helps oversee $105 billion in assets. "I wanted to see more credit growth as confirmation that the economy is doing better and that didn't show up."
Earnings for S&P 500 companies are expected to grow at a modest 1.2 percent in the first quarter, down from a January forecast of more than 4 percent, according to Thomson Reuters data. With only 6 percent of the S&P having reported thus far, 62 percent of companies have beaten expectations.
The S&P financial sector .SPSY lost 0.4 percent and was hurt by a delay in the closing of M&T Bank Corp's (MTB.N) acquisition of Hudson City Bancorp Inc (HCBK.O).
M&T shed 4.5 percent to $100.24 while Hudson slumped 5.5 percent to $8.29 as one of the S&P's biggest percentage decliners.
The Dow Jones industrial average .DJI was down 0.08 points, or 0.00 percent, at 14,865.06. The Standard & Poor's 500 Index .SPX was down 4.51 points, or 0.28 percent, at 1,588.86. The Nasdaq Composite Index .IXIC was down 5.21 points, or 0.16 percent, at 3,294.95.
Losses were offset in the Dow by Home Depot Inc (HD.N), which jumped 2.4 percent to $73.62 after Jefferies & Co upgraded the stock on expectations of strong first-quarter same-store sales.
Data showed retail sales fell 0.4 percent in March, while February's strong gain was revised down slightly. Consumer spending plays a key role in the U.S. economy, accounting for two-thirds of activity.
Another report showed consumer sentiment fell to a nine-month low in early April amid gloom about the long-term health prospects for the U.S. economy.
Investors have been rattled by indications economic growth could be softening, particularly after last week's disappointing jobs number, though that has not derailed the market rally so far.
The advance in equities in recent months was partly buoyed by the Federal Reserve's economic stimulus efforts, and analysts are viewing the first-quarter earnings season as a test for whether those gains are justified by corporate performance.
Material and energy stocks also fell alongside a drop in oil and precious metal prices. Oil prices sank 2.8 percent to an eight-month low while gold hit its lowest since July 2011. Prices were hit by concerns over the global economic outlook and the impact it could have on demand. <O/R>
Newmont Mining Corp (NEM.N) fell 5.9 percent to $36.37 while Newfield Exploration (NFX.N) was down 4.1 percent to $21.70. The SPDR Gold Shares ETF (GLD.P) fell 4.7 percent to $143.95 and hit its lowest close since May 2011. Friday marked the worst day for the gold ETF since February 2012.
About 58 percent of companies traded on the New York Stock Exchange closed lower while 57 percent of Nasdaq-listed shares closed in negative territory.
Volume was light, with about 5.94 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.36 billion shares.