U.S. stocks turned lower on Friday, as a weaker-than-forecast reading on consumer sentiment outweighed an unexpected increase in retail sales.

The markets initially rallied after the February retail sales were released, but turned negative after the Thomson Reuters/University of Michigan's Surveys of Consumers showed sentiment declined slightly in early March.

The data were mixed today, but we're weakening on the sentiment number since it so closely follows the job market, said Charles Lieberman, chief investment officer of Advisors Capital Management, LLC in Paramus, New Jersey.

I don't think we'll see a big uptick in sentiment until we start seeing jobs growth.

The Dow Jones industrial average <.DJI> fell 13.22 points, or 0.1 percent to 10,600.21. The Standard & Poor's 500 Index <.SPX> dipped 1.42 points, or 0.12 percent, to 1,148.82. The Nasdaq Composite Index <.IXIC> was off 4.92 points, or 0.20 percent, to 2,363.39.

Stocks rose modestly for three consecutive sessions this week, with the S&P hitting a 17-month closing high on Thursday.

The Commerce Department said business inventories were unchanged in January, compared with forecasts of a rise of 0.2 percent.

Dow component United Technologies Corp fell 1 percent to $71.35 after reiterating its 2010 profit outlook.

CF Industries Holdings Inc fell 5 percent to $95.63 after Agrium Inc abandoned its $5.4 billion bid for the company and brought CF closer to closing a deal with Terra Industries Inc . Agrium rose 7.3 percent to $71.63.

(Editing by Jeffrey Benkoe)