US Markets

Stocks close mixed on renewed geopolitical concerns

Investors want to be long: Pro
Investors want to be long: Pro

U.S. stocks ended the week mixed in below-average trade volume after news of fresh conflict between Russia and Ukraine.

Earlier, the major indices plunged, losing morning gains with only the Nasdaq climbing back into positive territory in the close for its best week since May. The Dow also recorded its best weekly gain in five weeks, despite closing lower for the day. With a flat close, the S&P 500 had its best weekly gain since July 3.

"The swings of the market on both side are over-exaggerated due to low volume," said Peter Cardillo, chief market economist at Rockwell Global Capital. "We're just seeing a market that's worried about it but yet not falling apart at the same time."

Next week, investors will look at more economic data, including CPI and housing starts. The Fed will also be in focus, with meeting minutes out on Wednesday and a gathering of central bank leaders in Jackson Hole, Wyoming, on Thursday.

Both Janet Yellen and European Central Bank President Mario Draghi will speak at the event, which investors will be watching given this week's .

"Really the focus right now is on Europe, not just Russia and Ukraine, but will the ECB step in to take hold of deceleration?" said Nick Raich, CEO of The Earnings Scout.

The Dow Jones Industrial Average lost most of its gains for the year as it dropped more than 130 points following the news, with Boeing among the hardest hit and Coca-Cola retaining the lead for blue-chip advancers.

Read More Ukraine attacks Russian incursion, jolting markets

"Now that we have a real geopolitical situation, now we have to wait to see what happens there in terms of casualties and Putin," said Stephen J. Carl, head equity trader at The Williams Capital Group. "I think anything can happen in the remainder of the session."

After the reports of increased tension between Ukraine and Russia, bond yields fell to session lows, and gold prices dropped before recovering to trade near earlier levels. Crude oil gained.

"The worry isn't the current action. It's whether this continues to escalate," said Kate Warne, investment strategist at Edward Jones. "There's nothing fundamental that has changed."

Read MoreTraders move to shore up defenses before weekend

The economic data flow resumed in the U.S. on Friday, starting with the Producer Price Index that rose 0.1 percent in July, in line with expectations.The Empire State Manufacturing Index fell in August. Industrial Production rose 0.4 percent, with the highest rate of utilization since June 2006. Consumer sentiment was a disappointing 79.2, the lowest since November last year.

"Unfortunately [the geopolitical conflict] is right back to page one, and that's not what we need," said Art Hogan, chief market strategist at Wunderlich Securities. When this happens, "we tend to largely ignore things which are fundamental."

Despite renewed focus on tensions between Russia and Ukraine, Scott Brown, chief economist at Raymond James, was still optimistic about the economy.

"The recover here is still intact," he said.

Stocks dipped before continuing a positive trend in the morning after the economic reports.

"I think [the data] was basically a non-event—what the markets want to hear," said Marc Chaikin, CEO of Chaikin Analytics.

Monster Beverages rose about 30 percent on Friday morning, boosted by Thursday's news of Coca-Cola taking a 16.7 percent stake in the firm.

"Certainly Coke leading blue-chips is good because it's been a laggard," Chaikin said.

Coke's 'Monster' deal
Coke's 'Monster' deal

Geopolitical events

Ukrainian artillery destroyed a "significant" part of a Russian armored column that crossed into Ukraine during the night, President Petro Poroshenko told British Prime Minister David Cameron on Friday, according to the presidential website.

Separately, a Ukrainian military spokesman said Ukrainian forces had tracked the Russian armoured column as soon as it crossed onto Ukrainian soil.

"Appropriate actions were undertaken and a part of it no longer exists," military spokesman Andriy Lysenko told journalists.

Russia, meanwhile, accused Ukraine of attempting to disrupt its humanitarian aid mission to eastern Ukraine and called for a ceasefire in the region to allow for the deliveries.

The fresh conflict reports are "the sole reason for the pullback," said Peter Boockvar, chief market analyst at The Lindsey Group.

On Thursday, in a speech in Crimea, which Russia annexed from Ukraine in March, Russian President Vladimir Putin struck a conciliatory tone: "We will do everything in our power so that this conflict is ended as soon as possible, so that the blood can stop flowing in Ukraine." The 280-truck Russian convoy is said to have arrived close to the border with eastern Ukraine, near a crossing point controlled by pro-Russian separatists.

Over in the Middle East, a new truce remains in effect after Israel and Palestinian factions agreed to extend the ceasefire for five more days on Wednesday.

Stock watch

Applied Materials was near the top of Nasdaq 100 gains on Friday after the firm reported that it earned 28 cents per share for its third quarter, excluding certain items, one cent above estimates, with revenue essentially in line. The maker of semiconductor manufacturing equipment was helped by increased spending by manufacturers to make mobile phone and memory chips.

Read MoreSloppy summer to continue this fall: Stock pros

Estee Lauder closed higher after the beauty products maker reported fiscal fourth quarter profit of 66 cents per share, beating estimates by ten cents, with revenue also above forecasts. The company said it had a strong quarter despite slower industry growth in some key countries.will post results before Wall Street opens on Friday.

Two major grocery store chains—Supervalu and Jewel-Osco—on Friday said they may have been adversely affected by computer data breaches.

Activist investor Carl Icahn also reported a 6.6 percent stake in Gannett on Thursday, saying his firm took the stake on the view that splitting the media company into separate print and broadcast firms could create value, a regulatory filing showed Thursday.

Chinese media firm Sina ended the week nearly 3 percent higher reporting a jump in advertising sales and better-than-expected growth in both revenue and earnings on Thursday, riding on a strong performance from its subsidiary, Weibo, China's version of Twitter. However, shares of the microblog itself fell 7 percent after reports showed growth in daily active users slowed during the last quarter to 32 percent from 37 percent in the preceding period.

Major U.S. Indexes

The Dow Jones Industrial Average closed down 50.6 points, or 0.30 percent, to 16,662.97, with declined 54 points, or 0.33 percent, to 16,658, with Visa the greatest of the blue-chip decliners and Coca-Cola leading the 8 advancers.

The shaved losses to close just 0.12 points down, or 0.01 percent, to 1,955.06, with telecommunications the greatest laggard and energy leading gains among 6 of the 10 sectors.

The Nasdaq reversed its decline to gain 11.93 points, or 0.27 percent, with Monster Beverages holding its lead on the Nasdaq 100.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, rose more than 8 percent to trade near 13.49. But the indicator was down 17 percent for the week, the largest weekly loss in 4 months.

Eight stocks advanced for every seven decliners in the close on the New York Stock Exchange, with an exchange volume of 757 million and a composite volume of 3.0 billion, just shy of the 3.1 billion average.

Crude oil rose $1.77 to close at $97.35 on the New York Mercantile Exchange, with gold paring losses to close down $9.50 at $1,306.20.

The U.S. dollar edged out a slight gain in the close after declining against major world currencies for most of the day.

The yield on the benchmark U.S. 10-year Treasury rose to 2.335 percent after falling to 2.315 percent.

—By CNBC's Evelyn Cheng. Reuters contributed to this report.