* JP Morgan, Wells Fargo shares fall after results
* Retail sales unexpectedly drop, sentiment also down
* Home Depot rallies on upgrade, limits losses in the Dow
* Energy and material shares among the day's weakest
* Indexes: Dow flat, S&P down 0.3 pct, Nasdaq down 0.2 pct
By Ryan Vlastelica
NEW YORK, April 12 (Reuters) - U.S. stocks closed slightly
lower on Friday, retreating from the previous session's record
highs on a drop in financial shares, but major indexes had the
biggest weekly gains since the first week of the year.
Shares pared losses in the final hour of trading, with the
Dow helped by a rally in Home Depot. For the week, the S&P 500
rose 2.3 percent while the Nasdaq rose 2.8 percent. It was the
best weekly gain for both since the first week of the year. The
Dow rose 2.1 percent.
Financial stocks were pressured on Friday by a pair of
disappointing bank results and a delay in closing a large bank
Weak retail sales and consumer sentiment data, suggesting
the economy lost momenturm, also weighed on stocks.
The string of discouraging data indicates that equities
could be vulnerable to a pullback, especially following a rally
that has taken the S&P 500 up 11.4 percent so far this year.
Telecom and healthcare, two defensive groups, were among the few
S&P sectors in positive territory.
"We're due for choppiness, given the run we've had,
especially since the strong data we've seen recently looks
increasingly misleading," said Hank Herrmann, chief executive of
Waddell & Reed Financial Inc in Overland Park, Kansas.
"We're moving at a slower pace, and those who got overly
excited about GDP growth are probably pulling in their horns a
On Thursday, the Dow and the S&P 500 closed at all-time
Both JPMorgan Chase & Co and Wells Fargo & Co
were lower after reporting results, with JPMorgan hit by
a decline in revenue and Wells Fargo by a reduction in home
loans. Shares of Wells dropped 0.8 percent to $37.21 while
JPMorgan, a Dow component, was off 0.6 percent at $49.01.
"The numbers weren't terrible, but also not terribly
inspiring," said Herrmann, who helps oversee $105 billion in
assets. "I wanted to see more credit growth as confirmation that
the economy is doing better and that didn't show up."
Earnings for S&P 500 companies are expected to grow at a
modest 1.2 percent in the first quarter, down from a January
forecast of more than 4 percent, according to Thomson Reuters
data. With only 6 percent of the S&P having reported thus far,
62 percent of companies have beaten expectations.
The S&P financial sector lost 0.4 percent and was
hurt by a delay in the closing of M&T Bank Corp's
acquisition of Hudson City Bancorp Inc.
M&T shed 4.5 percent to $100.24 while Hudson slumped 5.5
percent to $8.29 as one of the S&P's biggest percentage
The Dow Jones industrial average was down 0.08
points, or 0.00 percent, at 14,865.06. The Standard & Poor's 500
Index was down 4.51 points, or 0.28 percent, at 1,588.86.
The Nasdaq Composite Index was down 5.21 points, or 0.16
percent, at 3,294.95.
Losses were offset in the Dow by Home Depot Inc,
which jumped 2.4 percent to $73.62 after Jefferies & Co upgraded
the stock on expectations of strong first-quarter same-store
Data showed retail sales fell 0.4 percent in March, while
February's strong gain was revised down slightly. Consumer
spending plays a key role in the U.S. economy, accounting for
two-thirds of activity.
Another report showed consumer sentiment fell to a
nine-month low in early April amid gloom about the long-term
health prospects for the U.S. economy.
Investors have been rattled by indications economic growth
could be softening, particularly after last week's disappointing
jobs number, though that has not derailed the market rally so
The advance in equities in recent months was partly buoyed
by the Federal Reserve's economic stimulus efforts, and analysts
are viewing the first-quarter earnings season as a test for
whether those gains are justified by corporate performance.
Material and energy stocks also fell alongside a drop in oil
and precious metal prices. Oil prices sank 2.8 percent to an
eight-month low while gold hit its lowest since July 2011.
Prices were hit by concerns over the global economic outlook and
the impact it could have on demand.
Newmont Mining Corp fell 5.9 percent to $36.37 while
Newfield Exploration was down 4.1 percent to $21.70. The
SPDR Gold Shares ETF fell 4.7 percent to $143.95 and hit
its lowest close since May 2011. Friday marked the worst day for
the gold ETF since Feb. 2012.
About 58 percent of companies traded on the New York Stock
Exchange closed lower while 57 percent of Nasdaq-listed shares
closed in negative territory.
Volume was light, with about 5.94 billion shares changing
hands on the New York Stock Exchange, the Nasdaq and NYSE MKT,
below the daily average so far this year of about 6.36 billion