U.S. equities closed mostly lower on Friday as investors digested disappointing economic data, following a record-setting day on Thursday.
"The market has been on a tear and it got a little bit ahead of itself," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "I think what you're seeing here is some profit-taking and people squaring their books before the weekend."
The Dow Jones industrial average closed about 40 points lower, with IBM contributing the most losses. The benchmark S&P 500 fell nearly 2 points, with materials lagging, but managed to eke out a slight weekly gain. The Nasdaq composite rose about 0.1 percent and notched a seven-week winning streak, its longest since 2012.
"We had a disappointing retail sales report. ... Perhaps investors are reassessing the state of the economy," said Jack Ablin, chief investment officer at BMO Private Bank, noting investors may also be taking profits after Thursday's strong session.
"It feels like we're a little exhausted here," said Randy Frederick, managing director of trading and derivatives at Charles Schwab, referring to the recent rally in U.S. stocks.
Retail sales for July came in unchanged, with economists expecting a 0.4 percent increase. Meanwhile, the July reading of the producer price index showed a decline of 0.4 percent, as economists forecast a 0.1 percent gain.
"If you look at the retail sales number ex auto, the number is even weaker. We always think that the retail sales data is the true reflection of the consumer spending and the number produced today tells us that consumption is very slow. The number will also an impact on the start of the Third quarter," Naeem Aslam, chief market analyst at Think Markets, said in a Friday note to clients.
"I think this is the first indication of waning momentum for the consumer in the second half," said Lindsey Piegza, chief economist at Stifel Fixed Income. "Looking at the second quarter, its was very clear the consumer was doing the heavy lifting."