The Dow industrials and S&P 500 dropped on Friday on jitters that an economic recovery and corporate profits will be anemic after Chevron warned about second-quarter results and oil futures tumbled.

A drop in consumer sentiment added to the malaise, as data showed consumers' mood in July slipped to its lowest level since March.

Stock markets have also been pressured by declines in oil prices this week, underscoring worries that an economic recovery will be weaker than originally hoped.

The risk we have is that the strength the market was looking for is not going to show up this quarter, at least not to the extent they were hoping, said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Co in Reading, Pennsylvania.

The Dow Jones industrial average <.DJI> slipped 25.54 points, or 0.31 percent, to 8,157.63. The Standard & Poor's 500 Index <.SPX> was off 1.94 points, or 0.22 percent, to 880.74. The Nasdaq Composite Index <.IXIC> added 6.74 points, or 0.38 percent, to 1,759.29.

Oil futures fell 1.5 percent to $59.49 a barrel, and energy shares were the S&P 500's biggest losers.

Chevron Corp warned that second-quarter earnings would be hit by a sharp decline in U.S. refining margins and that any benefits from higher oil prices would be largely offset by a weaker dollar. Chevron lost 3.1 percent to $61.11.

Losses were limited in technology shares and the Nasdaq pushed higher after Goldman Sachs upgraded both the software and hardware sectors to attractive.

Among a round of ratings changes, Goldman raised Apple Inc's price target, boosting the iPod maker by 1.2 percent to $138.

(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)