Stocks stumbled in choppy trading on Friday as energy shares dropped on worries about weak demand, offsetting stronger-than-expected economic data.

A batch of reports including consumer prices and sentiment reinforced hopes the recession was easing and gave the market an early lift, but it was short-lived. Options expiration also added to volatility.

Chevron Corp and Exxon Mobil Corp were the biggest drags on the Dow as U.S. crude futures fell 3.8 percent to $57 a barrel, with dealers increasingly pessimistic about the outlook for global energy demand. Chevron lost 2 percent to $65.86, and Exxon gave up 1.2 percent at $68.94.

JPMorgan Chase & Co , down 1.5 percent at $35, was another drag on the blue-chip index and contributed to the 2.7 percent decline in the KBW bank index <.BKX>. The KBW has doubled since early March as investors hoped banks had seen the worst of the fallout from the credit crisis.

There's profit-taking (today) but after nine weeks of up 37 percent in the S&P 500, you can't keep going up. A correction or a breather seems to be predictable, said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

It's starting to look preliminarily as though the May economic numbers will also point to a recovery, and that's good news.

The Dow Jones industrial average <.DJI> fell 53.52 points, or 0.64 percent, to 8,277.80. The Standard & Poor's 500 Index <.SPX> slipped 9.59 points, or 1.07 percent, to 883.48. The Nasdaq Composite Index <.IXIC> was off 6.41 points, or 0.38 percent, to 1,682.80.

Equity options and some options on stock indexes stop trading at Friday's close and expire the next day. Typically, options expiration is orderly, but some volatility may occur as players unwind positions against stock and index products.

Investors are also trying to gauge how much further the rally from bear-market lows will be able to go. The S&P 500 has risen nearly 31 percent from a 12-year low hit two months ago, but is down nearly 5 percent for the week.

The Nasdaq is off 3.2 percent for the week, putting it on track for its first negative week since the first week of March.

Struggling General Motors Corp said it will drop about 1,600 U.S. dealers as it tries to cut billions of dollars in operating costs and debt ahead of an expected bankruptcy filing at the end of the month. Shares of GM were down 6.1 percent at $1.08.

(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)