RTTNews - After showing a lack of direction throughout much of the session, stocks ended Friday's trading mostly lower. The major averages all finished the day firmly in negative territory after ending the previous session notably higher.

The volatility seen earlier in the session came as traders digested a slew of economic data that added to investor uncertainty about the outlook for the markets. Below average volume also contributed to the choppy trading.

Before the start of trading, the Labor Department said its consumer price index was unchanged in April after edging down by 0.1 percent in March. The lack of growth in consumer prices came in line with the expectations of economists.

While energy prices showed another significant decrease, the 2.4 percent drop in energy prices was offset by a 9.3 percent jump in tobacco prices. Food prices slipped 0.2 percent in April after edging down 0.1 percent in March.

The report also showed that the core consumer price index, which excludes food and energy prices, rose 0.3 percent in April after rising 0.2 percent in each of the three previous months. Economists had expected core prices to edge up 0.1 percent.

Additionally, a report from the Federal Reserve showed a slightly smaller than expected 0.5 percent decrease in industrial production in April, while the Reuters/University of Michigan Consumer Sentiment index rose to 67.9 in May from 65.1 in the previous month.

On the earnings front, retailer JC Penney (JCP) reported first quarter earnings that edged out analyst estimates, while Abercrombie & Fitch (ANF) reported a first quarter loss.

In other news, ailing automaker General Motors (GM) said Friday that it has started to notify about 1,100 underperforming and very low sales volume U.S. dealers that they will not be retained on a long-term basis.

The move is part of GM's updated viability plan submitted last month under which the automaker plans to reduce its current dealer network of 5,969 stores to about 3,600 by the end of 2010.

The major averages all closed notably lower, although off their worst levels of the day. The Dow closed down 62.68 points or 0.8 percent at 8,268.64, the Nasdaq closed down 9.07 points or 0.5 percent at 1,680.14 and the S&P 500 closed down 10.19 points or 1.1 percent at 882.88.

With today's losses, the major averages all closed lower for the week, with the Nasdaq snapping a nine-week winning streak. The Nasdaq fell 3.4 percent for the week, while the Dow and the S&P 500 posted weekly losses of 3.6 percent and 5 percent, respectively.

Sector News

Most of the major sectors moved lower over the course of the trading session, with real estate stocks showing notable declines on the day. The Morgan Stanley REIT Index closed down 4.2 percent, moving further off the three-month closing high it set last Friday.

Significant weakness also emerged among healthcare provider stocks, as reflected by the 4 percent loss posted by the Morgan Stanley Healthcare Provider Index. The index pulled back further off last week's seven-month high, falling to its worst levels since late April.

Kindred Healthcare (KND) turned in one of the sector's worst performances, with the healthcare services company closing down 8.7 percent. Sunrise Senior Living (SRZ) and Health Management Associates (HMA) also posted notable losses.

Oil service stocks also moved sharply lower on the day, reacting to a steep decline by the price of crude oil. With crude for June delivery closing down $2.28 at $56.34 a barrel, the Philadelphia Oil Service Index closed down 3.2 percent.

While considerable weakness was also visible among banking and utilities stocks, some computer hardware stocks posted strong gains, helping to limit the downside for the tech-heavy Nasdaq. Some transportation stocks also bucked the downtrend by the broader markets.

Dow Components

A vast majority of the Dow components ended the day in negative territory, contributing to the steep loss posted by the blue chip index. Of the thirty Dow components, only six closed above the unchanged line.

Reflecting weakness in the banking sector, Bank of America (BAC) turned in one of the Dow's worst performances, with the financial services provider closing down 5.7 percent. With the loss, Bank of America pulled back further off last Friday's four-month closing high.

Shares of General Motors (GM) also showed a steep decline on the news that it is severing ties with more than 1,000 of its dealerships as part of its restructuring plan. GM ended the session down 5.2 percent, at its worst closing level since the Great Depression.

Drug giants Merck (MRK) and Pfizer (PFE) also posted significant losses after trending higher in recent sessions. Chevron (CVX), Intel (INTC), and American Express (AXP) were among the other Dow components that posted notable losses.

On the other hand, shares of Alcoa (AA) showed a strong upward move over the course of the session, with the aluminum producer closing up 3.3 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Friday, moving back to the upside following the weakness seen in the previous session. Japan's benchmark Nikkei 225 Index ended the day up 1.9 percent.

Meanwhile, the major European markets ended the day mixed. While the U.K.'s FTSE 100 Index edged down 0.3 percent and the German DAX Index closed just below the unchanged line, the French CAC 40 Index closed up 0.4 percent.

In the bond market, treasuries ended the day modestly lower, but well off their worst levels of the day. Subsequently, the yield on the benchmark ten-year note closed up 1.6 basis points at 3.123 percent after reaching a high of 3.156 percent.

Looking Ahead

While the economic calendar is relatively light next week, traders are likely to keep an eye on reports on housing starts, leading economic indicators, and Philadelphia-area manufacturing activity. The Federal Reserve is also due to release the minutes of its latest meeting.

Additionally, Hewlett-Packard (HPQ), Home Depot (HD), Lowe's (LOW), Target (TGT), Campbell Soup (CPB), and Deere (DE) are among the companies that are due to release their quarterly results next week.

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