Stocks finished in negative territory Friday, with the Dow snapping a 10-day win streak and the S&P 500 ending shy of its record closing level, following a disappointing consumer sentiment report and as investors started to question whether the recent rally has run out of steam.
(Read More: No 'Irrational Exuberance' in Stocks Now: Greenspan)
"We're near the all-time high and you'd have to start betting on a mean reversion," said Brian Battle, vice president of trading at Performance Trust Capital Partners.
The Dow Jones Industrial Average finished lower for the first Friday in 2013, weighed by JPMorgan, while Bank of America jumped nearly 4 percent to lead the gainers. Still, the blue-chip index logged its fourth-straight week of gains and is up an impressive 11 percent so far this year.
(Read More: Will the Ides of March Kill the Rally?)
The S&P 500 ended almost 5 points from its 2007 closing high and the Nasdaq also ended lower. Still, both indexes posted their third-consecutive week of gains.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, ended above 11.
Major averages took another leg lower after a report that showed consumer sentiment dropped 71.8 in early March, tumbling to its lowest since December 2011, according to the Thomson Reuters/University of Michigan's preliminary reading. Economists expected a reading of 78.
Earlier, traders reacted little to a morning economic report showing inflation, though pushed higher by surging gas prices, remained within parameters allowing the Federal Reserve to continue its ultra-easy monetary policy.
The pace of manufacturing in the New York state slipped to 9.24 in March from 10.04 in February, according to the New York Federal Reserve. Economists expected a reading of 10.
(Read More: Stocks Could Hit New High With US Data on a Roll)
Meanwhile, industrial production grew 0.7 percent in February, according to the Federal Reserve, topping estimates for a gain of 0.4 percent. Manufacturing output rose 0.8 percent during the month, snapping back from a decline in January.
Among financials, Goldman Sachs and JPMorgan declined after both banks received conditional approval for their capital payout from the Federal Reserve.
Meanwhile, Citigroup, Wells Fargo, Morgan Stanley and Bank of America were among names whose capital plans were approved. but BB&T and Ally Financial did not pass.
Groupon rallied after widely-followed investor Bill Miller said he likes the stock. Miller said he also likes Apple, Texas Instruments, and US Airways.
Investors in Europe booked gains after a 10-day global rally. U.S. shares closed at record levels on Thursday, but markets were disappointed by President Barack Obama who seemed no closer to striking a deal on deficit reduction after a long session in Capitol Hill.
(Read More: Contentious US Budget Talks Point to Small Deficit-Cut Deal)
This week's final trading day will also feature the quarterly "quadruple witching" options and futures expirations. Quadruple witching is associated with market volatility as investors seek to rebalance their portfolios. (CNBC Explains: Witching Hour)
?By CNBC's JeeYeon Park (Follow JeeYeon on Twitter:@JeeYeonParkCNBC)
? 2013 CNBC LLC. All Rights Reserved
Source: http://www.nbcnews.com/business/dow-snaps-10-day-rally-still-ends-4th-week-1C8886087
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