U.S. stocks faltered on Friday as investors booked profits and energy shares pulled back alongside oil prices.
A jump in the savings rate also weighed as investors fretted that the economy will not be able to make much headway if consumers save rather than spend.
Data showed while consumer spending and income both rose in May as the government stimulus spread through the economy, much of the stimulus money was being socked away. Savings jumped to a record annual rate of $768.8 billion, the highest level since record keeping began in 1959.
We need people to spend money in order to keep the economy humming, said Joe Kinahan, chief derivatives strategist at online brokerage thinkorswim Group in Chicago. The consumer has been the stalwart of the economy at this point, and we still need them to be.
Even so, a separate report showed consumer sentiment rose in June to the highest since February 2008 as hopes grew that the recession is abating.
The Dow Jones industrial average <.DJI> slipped 49.43 points, or 0.58 percent, to 8,422.97. The Standard & Poor's 500 Index <.SPX> eased 5.31 points, or 0.58 percent, to 914.95. The Nasdaq Composite Index <.IXIC> was off 7.01 points, or 0.38 percent, to 1,822.53.
Stocks were also be buffeted by end-of-quarter window dressing as portfolio managers sell stocks with big losses and buy some of the quarter's best-performing stocks to help improve their returns.
(Reporting by Leah Schnurr; additional reporting by Doris Frankel; editing by Jeffrey Benkoe)